10 years since the start of the financial crisis.

[Ayahuasca]

BlackLabel said:

So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?

The thing is, there is a generation of mortgaged people who have been used to nothing but very low rates. Some of them are just about managing to pay their mortgages on these low rates. If rates double (which, from their very low base is almost nothing), they will be unable to make the repayments...

It was mortgage payers defaulting that pulled out the last block in the Jenga tower of finance last time around...

[loafer123]

BlackLabel said:

So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?

We are turning Japanese.

I really think so.

[menousername]

BMWBen said:

So did you or didn't you buy it for 63k in the year 2000 like you said?

I wont link but i saw one bought for 140k in 2010 that sold this year for 300k

I cannot find historic prices on that exact house but one a few doors up sold in 1998 for 64k

it is a row of terraced houses, all the same layout with no real room to extend. The 300k one certainly had not been extended, nor revocated to any significant standard.

[4159265]

Ayahuasca said:

BlackLabel said:

So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?

The thing is, there is a generation of mortgaged people who have been used to nothing but very low rates. Some of them are just about managing to pay their mortgages on these low rates. If rates double (which, from their very low base is almost nothing), they will be unable to make the repayments...

That's the thing.

Many people with a cheap mortgage who have spent the slack elsewhere (shiny 1 series, Rolex on tick etc). As rates shift up I think we'll see some struggling.

I'm far too risk averse though, costed our mortgage up to 15%

[JB!]

Been looking at long-term Kondratieff waves.

The actions of 2007/8 have just kicked the can down the road, delayed the inevitable, if anything made it worse.

If we'd have lat nature run its course we should be seeing an upswing now-ish, instead it's looking pretty stagnant...

[Willy Nilly]

loafer123 said:

BlackLabel said:

So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?

We are turning Japanese.

I really think so.

[BMWBen]

4159265 said:

Ayahuasca said:

BlackLabel said:

So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?

The thing is, there is a generation of mortgaged people who have been used to nothing but very low rates. Some of them are just about managing to pay their mortgages on these low rates. If rates double (which, from their very low base is almost nothing), they will be unable to make the repayments...

That's the thing.

Many people with a cheap mortgage who have spent the slack elsewhere (shiny 1 series, Rolex on tick etc). As rates shift up I think we'll see some struggling.

I'm far too risk averse though, costed our mortgage up to 15%

I think that the reality is that it's pushed prices up rather than creating slack for people to spend... At least lower down the food chain. Some people may have remortgaged to take the cash out but people who are late to the party don't have that option.

[4159265]

BMWBen said:

4159265 said:

Ayahuasca said:

BlackLabel said:

So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?

The thing is, there is a generation of mortgaged people who have been used to nothing but very low rates. Some of them are just about managing to pay their mortgages on these low rates. If rates double (which, from their very low base is almost nothing), they will be unable to make the repayments...

That's the thing.

Many people with a cheap mortgage who have spent the slack elsewhere (shiny 1 series, Rolex on tick etc). As rates shift up I think we'll see some struggling.

I'm far too risk averse though, costed our mortgage up to 15%

I think that the reality is that it's pushed prices up rather than creating slack for people to spend... At least lower down the food chain. Some people may have remortgaged to take the cash out but people who are late to the party don't have that option.

There's a big rent-the-life trend though. Cash is coming from somewhere.

The fact is that if you drive through some 'usually lower end' bits of town - take housing estates for example, you'll see more and more newer cars of what used to be high end marques (Audi et al).

I'd take a guess that as affordability is now key to obtaining a mortgage we're seeing other ways of peacocking.

If rates go up and people struggle it'll be interesting to see what changes first.

[Gecko1978]

4159265 said:

There's a big rent-the-life trend though. Cash is coming from somewhere.

The fact is that if you drive through some 'usually lower end' bits of town - take housing estates for example, you'll see more and more newer cars of what used to be high end marques (Audi et al).

I'd take a guess that as affordability is now key to obtaining a mortgage we're seeing other ways of peacocking.

If rates go up and people struggle it'll be interesting to see what changes first.

I suspect this has always been the case but in the 80s audi, bmw jaguar etc did not have a lower end in their range so you see a 1 series A class or xe which you would not have seen before. PCP Also allows people to get that new car they have always wanted i doubt many ever pay baloon payment at the end. Re rates the boe looks after the economy an rasing rates so there was a housing crisis where people lost everything would not help at all. So rates stay low perhaps we are japan now. The Euro zone have a higher rate but i doubt in next 5 years it will rise much again people loosing homes is a vote looser.

[Thankyou4calling]

BMWBen said:

So did you or didn't you buy it for 63k in the year 2000 like you said?

I questioned whether someone bought a 4 bed detached in that area in 2000 for £110k, JAYB didn't and I still haven't heard from the guy who claimed he did.

I asked because I paid that amount for a 4 bed detached in 2000 but it was in Daventry, a much cheaper area I thought than the witterings.

[PBDirector]

Thankyou4calling said:

Where was this? Without significant improvements I can't see that sort of increase.

Cambridge. No improvements.

[Ayahuasca]

The question is, is it worth sinking more cash into the stockmarket now to ride the rest of the wave, or is it about to crash into the rocks?

If Kim and Donald kick off, markets will plummet too...

Time to buy gold?

[4159265]

Gecko1978 said:

I suspect this has always been the case but in the 80s audi, bmw jaguar etc did not have a lower end in their range so you see a 1 series A class or xe which you would not have seen before. PCP Also allows people to get that new car they have always wanted i doubt many ever pay baloon payment at the end. Re rates the boe looks after the economy an rasing rates so there was a housing crisis where people lost everything would not help at all. So rates stay low perhaps we are japan now. The Euro zone have a higher rate but i doubt in next 5 years it will rise much again people loosing homes is a vote looser.

Yup - we're stuck.

I think we have seen some attempts to try and prepare or sober the unsecured / auto credit part of banking by some of the words from the Canadian and the increase in the Countercylical Capital Buffer requirement. My employer has a strong capital base but has still taken some steps, lending has a much deeper penetration than 20-30 years ago.

I'd like an increase in rates, mainly to clear out the deadwood but as you say - no one will take that step.

[rufusgti]

This is an interesting read for me. 10 years!

In 2007 I was 27 like louiebaby on the previous page. Generally kicking the through my mid twenties without much care, Secure in work as a Carpenter.
I bought my first house in November 2007 when muttering of crisis were around but I felt somehow (and was wrong) that the falling prices wouldn't reach Wales as prices were already so low. It was a bad year for me and my Girlfriend who fell ill with breast cancer that Christmas. The doom really did hit the news and I felt like I'd made a huge mistake with the house. I wasn't in negative equity however so I was never in any danger financially but I was worried and knuckled down to saving money.
By 2012 me and my girlfriend wanted to buy a house together. Now the interesting thing was the rate drop. My mortgage payments had dropped by a third and my worry over the economy and future had helped us save a substantial deposit. This meant I didn't have to sell the house which was still worth less than I payed (and still is). Renting your house out and buying another was all the rage in 2012. That somehow doesn't make sense does it? 4 years after the crisis and I had no issues what so ever doing this.
So house two, A home to start a family. Bought in 2012, different area which has done phenomenally well since. Again, the low price because of the market and low interest rates, coupled with healthy deposit really gave us a leg up. Not by being clever, just nothing flash, ok house, ok street, ok area. Knowing we wanted kids meant we didn't stretch ourselves. That was a great move for us.
Again with super low interest rates dropping each time we changed lenders we were able to save another deposit for our first purpose bought btl. That was in 2015 and is doing really well. And given us a bit of leg up in income and equity. We noticed how much harder it was to secure lending in 2015 from 2012. And I believe things are harder still now but we have come through it without running into issues and are now in a secure position with equity. We will be selling our family home next year for something slightly bigger, again without stretching ourselves too much.
I'm not a fan of bragging on these forums and I hope I haven't come across as bragging. My point is I'm not a boomer, I'm now 37 and I can't help but look back on the last ten years and feel it's been incredibly good to me. There's an awful lot of news out there that the young can't buy a house. They have been robbed by the boomers who have hoarded wealth. Well no, not from where I'm sitting. I've done expenentialy better than my parents over the last decade who were ready to retire with a pot of money just before interest rates collapsed. They have seen their wealth deteriorate over the last decade. Their home hasn't increased in price for ten years and their money gets them no interest.
As said previously, I may not be the norm. But having said that, most of my friends have done well for themselves in the last decade. It probably is harder to buy that first property right now but I don't think it will always be like that. At some point wages will start to rise, and that may come at a time where house prices have stagnated, we could be seeing this already. At that point it's the young people who actively seek their opportunity who will do well.

[Gecko1978]

rufusgti said:

This is an interesting read for me. 10 years!

.......some other stuff....

I've done expenentialy better than my parents over the last decade

Your similar age to me in similar circumstances (i live in the south east). I rarely think I have done well till i do the sums and then realise the last 10 years has served me well.

1st house sold to buy bigger home in 2006 made all of 2k after fees on it. Second house bought for an amount i thought was all the money in the world at the time...11 years later nearly 2x the value with mortgage that i had halved. I that time we bought a second home and renovated it. Again value in 2008 to now has nearly doubled though in part due to money we put into it so profit would be close to zero. Just moved this week to 3rd home. Have that sinking feeling i am at the top etc paid too much but also i know 5 years from now i will have paid half it back an feel much better.

I dont feel i have done well more like you i have worked hard an been ok got by etc. Not a boomer just a normal guy who has made a few good choices....i think its that which helps you ride out the ups an downs push yourseld don't stretch yourself

[MG CHRIS]

Willy Nilly said:

loafer123 said:

BlackLabel said:

So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?

We are turning Japanese.

I really think so.

Was about to say isn't this how Japan has been since late 90s low interest rates and low growth just plodding along.

[Justayellowbadge]

Thankyou4calling said:

BMWBen said:

So did you or didn't you buy it for 63k in the year 2000 like you said?

I questioned whether someone bought a 4 bed detached in that area in 2000 for £110k, JAYB didn't and I still haven't heard from the guy who claimed he did.

I asked because I paid that amount for a 4 bed detached in 2000 but it was in Daventry, a much cheaper area I thought than the witterings.

I did.

The quote I was commenting on didn't mention a location iirc. I only mentioned mine to suggest the uplift mentioned was doable.

[BMWBen]

rufusgti said:

/snip bunch of interesting stuff

It does sound like the last 10 years have been good to you. On your point about how the young might not be hard done by, where do you think the money that has led to the increase in value of the homes you've bought has come from?

[loafer123]

MG CHRIS said:

Willy Nilly said:

loafer123 said:

BlackLabel said:

So essentially it all hinges on interest rates? If they rise by a significant level we (the nation's economy) are screwed but if they remain low we'll plod along just fine?

We are turning Japanese.

I really think so.

Was about to say isn't this how Japan has been since late 90s low interest rates and low growth just plodding along.

Late stage capitalism.

At least we don't have a falling population.

I love Japan and have been a few times...there are worse outcomes.

[m444ttb]

I work in product management within retail banking and 2007 was my first year (having worked in other areas for the first 5 years) working on savings. Suddenly we were trying to manage a massive influx of funds with people looking to get their savings out of some of the banks that looked iffy and those who simply wanted to spread their risk a little (the FSCS limit was lower then). Later on when the base rate dropped 1.5% I remember informing our head of savings and he was insistent I'd got it wrong by a factor of 10! It was an interesting time for sure.

From a personal perspective 2007 was also around the same time I realised things were definitely serious with my then girlfriend (now wife). My best friend bought his first house in 2007 on a 100% mortgage and while I found the idea of this uneasy I found it hard to look past my jealousy at him owning his own place while we lived with parents. My (now) wife didn't want to buy yet thankfully as I'm sure I'd have jumped in. Luckily we saved and bought somewhere 18 months later. Without a doubt we couldn't have bought the house we did at 2007 prices. So as I'm still employed and the house is currently worth £100k more than we paid I feel very fortunate. The other piece of good fortune, at last in hindsight, was my wife being made redundant. She was looking for a job here anyway but was working for a sharedealing company in Bristol. They lost a number of big clients (have a feeling HBOS was one) and she was therefore made redundant. Basically they paid her to do the job seeking and get a nice summer holiday in her new house!

The tv this week also reminded me that an old school friend was a couple of months into a job at Lehman brothers having left Deloitte. Gutted!