Were there many STRs before/during the last crash?

ginger_nuts

I bought my first house in 1991 .I paid the same price as the seller had paid 5 years earlier .

baileysbattlebus

We sold our house in about 94/5 for exactly what we paid for it in 88.
As for interest rates - I thought we paid about 15% for a time - I do remember at one point we were paying half of DH's salary on the mortgage.
I can only comment on our own experiences, at the time it was very tough.

In terms of consumer goods things are an awful lot cheaper than they used to be, especially electrical items, most people if you need a washing machine costing £200 can go and buy one without having to take out a credit agreement - then a washing machine was a major purchase, so was a tv, so was a sofa. I can remember in 87 buying a tv and video player from Dixons (to replace portable tv and rented video player) it cost £200 for the tv and £300 for the video player, that was buying Matsui brand - about the cheapest at the time. And we had to buy them on HP. Our first PC in the 90's was an IBM cost £2k (which was serious money). If your DVD player breaks, do you get it repaired or just go and buy a new one?

"In Britain in recent years, as in other rich countries, many consumer goods have become deliciously, dizzyingly cheap. Since 1995, according to the Office for National Statistics (ONS), the price of women's clothing has fallen by 34%, the price of a vacuum cleaner by 45%, of home audio-visual equipment by 73%, and of personal computers - adjusting the price index to take account of their improved capabilities - by a scarcely believeable 93%."

And as for mortgages being much more difficult to get and having to have much larger deposits - our first house was £23.5k in 1982, we had £300 deposit, but we did have to go and be interviewed buy the local building society manager and it was 3 x income. One of the big differences, I think, is that if you were a couple it wasn't 3 x joint incomes, it was usually 3 x 1 + 1 x 1.
In the south east in 87, I know you could get 4 x salary because and estate agent's broker offered one to us, which we didn't take up.

WTF?_2

EdInvestor wrote: »

Tax also needs to be factored in: IIRC in the 80s basic rate was 35% or so - that's why MIRAS was so important and why everyone rushed to get on the ladder so that both parties would be eligible.

These days income tax rates are much lower, and while other taxes may be higher ( petrol, VAT etc), you do have a choice about paying them, to some extent at least.
The other big difference is that consumer goods like sofas, washing machines and TVs are hugely cheaper.

Basically there's a lot more "slack" in the income vs outgoings balance sheet before people will be in so much trouble they are forced to sell..That suggests there will be no crash.

Income tax rates are lower but general taxation is much higher.

Inflation is starting to really get momentum - it's been a lot higher than the massaged 2% CPI or so that we've been fed - and food and energy prices have started to rocket.

The effects of the deteriorating situation on employment haven't really been felt yet. Expect that to start kicking in very soon. And that will have a feedback effect as job losses cause people to stop spending which causes more job losses.

But hey, flat screen tellies and iPods have never been cheaper right now, so it's all good.

You really appear to be living around 2 years in the past.

EdInvestor

a new survey shows that as far as the cost of everyday household goods on the high street are concerned, shoppers have never had it so good.

According to Pricewaterhouse-Coopers (PwC), the accountants, the prices of everything from a kettle to a camera have tumbled by nearly 50 per cent since the early 1970s. At Argos, prices have fallen 47 per cent in real terms since Richard Tompkins, the founder of the Green Shield Stamps empire, launched the chain in 1973 with a 250-page catalogue.

A fan heater in the original catalogue priced at £7.60 would cost £51 in today’s money, given the impact of inflation over the past 35 years. A similar product retails today at £12.99. PwC adds that the cost of typical clothing lines, such as blouses and children’s T-shirts at Next, have tumbled by an average of 48 per cent since 1988.

The biggest price-cuts have come in the past decade, as retailers have taken advantage of improvements in technology, the manufacture of products overseas and, most recently, the depreciation of the dollar against the pound.

Mark Hudson, PwC’s head of retail and consumer, said: “What we purchase now compared to the 1970s is much cheaper, that’s why you see four or five televisions in a house now. Before, the family would have one black-and-white TV set and it would be a luxury.

“Around 90 per cent of the deflation we have seen has been in the last ten years. Manufacturing costs have come down and we have also benefited from the intense competition among retailers and the increasing importance of the internet. Consumers have so much price information at their fingertips.

“The good news is that we believe prices will continue to fall. There are a lot of people with products to sell in the current economic climate.”

From the Times


It would also be interesting to look at prices for utilities and telecoms, if memory serves they are much cheaper too nowadays.As are things like restaurant meals, probably because there is much more competition - and much higher sales volume as people are so much better off.

WTF?_2

EdInvestor wrote: »

From the Times


It would also be interesting to look at prices for utilities and telecoms, if memory serves they are much cheaper too nowadays.As are things like restaurant meals, probably because there is much more competition - and much higher sales volume as people are so much better off.

You really should watch this video clip in full:

http://www.youtube.com/watch?v=LfascZSTU4o

This was TWO YEARS ago. before things went bad and at a time when the global and US economies were steaming along full speed ahead.

Schiff was reading the writing on the wall and 'telling it like it is', Laffer was ridiculing his warnings as the economy was going so swimmingly at that point in time.

We all know how it's turned out.

You seem to me to be a lot like Laffer, tragically over-optimistic. The signs are all here but you are steadfastly choosing to ignore them. I'm happy for your optimism but I do worry that someone might take it seriously and make a huge financial mistake and jump into the housing market because they are influenced by it.....

m00m00

consumer goods may be cheaper per item now, but we buy a hell of a lot more of them.

also food and fuel, two fairly essential items are increasing in price rapidly

PasturesNew

m00m00 wrote: »

consumer goods may be cheaper per item now, but we buy a hell of a lot more of them.

A lot of which are from choice, so the option is there to not buy them

m00m00 wrote: »

also food and fuel, two fairly essential items are increasing in price rapidly

Food nowadays is a LOT cheaper than it was back then. Supermarkets weren't as big or powerful or cheap. Back then they sold you food with a few little sales. Now it's a huge BOGOF monster trying to sell everything under the sun cheapest.

As for fuel, I think I read somewhere that it is still cheaper nowadays by some calculation (proportion of income might be the one). And back then we did a lot less travelling for pleasure than people appear to do these days. So it was more expensive and we didn't drive as far. But I can't substantiate these with links.

Our cars were certainly less fuel efficient too.

m00m00

one of my old cars did 18mpg on a good day, and would hit single figures if the engine was being really worked, and it was very lightweight unlike the 4x4 behemoths that pollute the road these days.

PasturesNew

m00m00 wrote: »

one of my old cars did 18mpg on a good day, and would hit single figures if the engine was being really worked, and it was very lightweight unlike the 4x4 behemoths that pollute the road these days.

I used to drive Toyota Celicas.
- 20mpg round town,
- 34mph if you ever went onto an open road.

I had three of these over time.
http://www.toyoland.com/cars/celica.html