BadgeIsBack

I've long been amused by house price chit chat on BE.

I've just been looking at houseprice crash forums UK...interesting reading..the usual mix of wackos and more serious people. There is a little bit of worry over price inflation and 'how bad it might be'...

Most migrants who are in the upper range of the migration age limit say mid 40s or below might have bought in the mid 1990s and perhaps lucky enough not to have lost out in the early 90s...this helped them fuel a massive lifestyle change and move to Australia this last 10 years where they have continued to be lucky.

A thread from houseprice...

"In the early 90s you could buy an average house in London for 60K ( 3 bedroom), 80K got you a 3 bedroom in a decent area. The one thing I have noticed that wages havn't changed much. In the early 90s an average IT worker was getting 20K-30K (permanant) in London . Alot of my friend in their mid 20s were on this with no college debt and with the high interest rates were able to compound their savings. Even though interest rates were high prices were low and they had decent income in relation to repayments.
Unskilled wages have hardly moved at all which is frightening since then."

Sort of curious, naive question:

I've often wondered how easy it must have felt earning a reasonable salary in the Uk say ~30k and rocking up and buying a family home (or maisonette in London say) pretty much anywhere in the UK - even in the SE for not a lot of money, (or equivalent).

Did it seem too easy? I am interested in the general sentiment and psychology - and how risky it felt. Interest rates were higher then, but the actual amount was lower too. I remember people dropping out of 6th form college, finding work and getting mortgages in the early 90s.

I can understand that buying say in 1992-1993 was harder as there was less houses on the market (people hanging on) and more competition to get that bargain..but certainly from say 1996-1998 it must have been almost too easy when prices started to wind up slowly. (I seem to remember that the only thing stopping young people was not having a GBP3-5k deposit. I was out of the country and was told by a knowledgeable man (yes he was!) in early 1998 that prices were about to 'rocket' - I was stupid - I should have bought a 3 bed semi in London).

When I bought at 3 times my income in 2000 it was too easy too. The only thing that smarted was being priced out of the best areas due to the first major hike of 99-00 in what was probably the first year of the housing boom. I've always said I missed out by exactly a year - but I still made GBP40k.

So how it did feel? Was it a risky venture, or 'too easy'..a golden age for buyers?

Kooky.

I started again, with nothing, when I left my husband in 1990. (I was 28.)

I was on about GBP14k and bought a very tidy (but very 1980s) 3 bedroom stone Victorian end-of-terrace in the canalside villagey outskirts of Leeds for (IIRC) 41500, 5% deposit. I had a fixed rate 15.4% As I also had a car loan back then, I struggled. No, it certainly didn't "seem easy".

Fast forward a few years and I was on >30k, with the same mortgage at a much lower rate. House completely renovated, replastered walls, stripped floors, new windows - wood mock sashes, custom made - solid wood built-ins, cast iron fire...beautiful. (Dad was a joiner and I went out with one for a while too - very handy, he was )

I got together with The Geek in 2001 and we left the UK mid-2002. Between us then we were on >80k and our mortgage was GBP157 a month, no other debts. Yes, I guess that was "easy" but I worked very hard to get to that stage.

(To complete the picture, rented it out for a year at 550pcm and then sold it for 110k.)

BadgeIsBack

Thanks for the story Seasider! I'm waiting for the stories from people who bought say 1996-1998 and with good jobs. They were probably the most fortunate.

I have this distinct memory of London, 1997. First started out in industry.
New Labour - a sort of new confidence in London around that time -with people having money to flash around. (I suspect it was also the case I had more money to flash around and was new on the scene in industry and so noticed it more). That was the time for me to go to the bank for a mortgage, not 2000 - imagine the riches...

Kooky.

I guess what people did with their loadsa money back then depended on their priorities. Some bought property with it, some stuck it up their nostrils.

BTW the late 1980s were the incredibly flash, hedonistic times I recall, so don't you young folks go thinking you invented them will you?

Beyond making sure me and mine are comfortable and living an interesting life, I've never been that money-oriented, TBH (and I'm not good on drugs either ). I wouldn't make a good slum landlord.

Grayling

So were the 60's....so don't go thinking you invented it either

Kooky.

Well that was my implied point - it's cyclical but, like music, we all think our own times were the best.

I do just about remember the 60s, being of a 1962 vintage, but was blissfully unaware of money. That said, being from the North East my joiner/builder Dad always went darn sarf for work.

I also remember the bad times in the 70s (Dad was then in the Middle East) and when I left uni in 1982 you didn't ask people, "what do you do?", as most of them didn't. Perversely I dropped out and was working when my peers graduated in 1983 and many spent a year or so on the dole.

BadgeIsBack

Agreed. I was still at school in the 80s...I make no claim.

It's my view that people abscribing lifestyle claims to decades is sometimes unreliable...

The 80s boom I thought partly came about through the 'Big Bang' deregulation in 1986/7 and so part of it was just the end of the 80s..Enfield's 'Loadsa money' was very 1988 - this was the year before the peak of houseprices in 1989.

there have always been people relatively cashed up .....and living well.

Kooky.

For sure, the early and late 80s were worlds apart.

BadgeIsBack

I was 10 years behind you - I managed to spend most of the first of the last recession safely ensconsced in HE.

On houseprice crash, people are making North/South parallels again. 'Watch out in the North!'

Bermudashorts

I transferred to London in 1995 at age 25, just qualified as an accountant and earning about £25k. A year later I moved jobs and in 1996 was on £30k.

It was most definitely not possible to buy a 3 bed place in London for easy money at that time. I did a lot of flat hunting at that time and bought a one bedroom flat for £87k in Wimbledon, I did not have a deposit so got a 100% mortgage and had to pay an insurance indemnity so borrowed £90k which was three times salary.

I remember the struggle I had, I even remember I had to make sure that my first mortgage payment was on a particular day (after pay day) or I just would not be able to make it. I remember being asked for a deposit at exchange and I said I don't have a deposit I am getting a 100% mortgage. I think my deposit was £500! The transaction was completed early 1997.

A year later the same flats were selling for about £160k and I would not have been able to afford it. I finally sold in 2006 for £225k. People always knock 100% mortgages, it was the best financial decision I ever made.

BadgeIsBack

That seems expensive, actually, a friend got one in 2000 for GBP115 near Wimbledon.
Must have been a nice part of Wimbledon..maybe?

The fact it was still only 3x salary speaks volumes compared to current climes..

I did have the chance to get a 2 bed flat in a nicer part of SW London for 87k in 1997.

I actually paid that in 2000 for a crummy flat not so far from Wimbledon...but the wrong side of the tracks...

I sold it for 135 in 2003 - and they are not much more now - so this supports - in this instance, the fact the location was a mistake, but was dictated in some ways. Your flat outpeformed mine considerably!

papilon

Yeah i would say this about 10 years out of date, the mid 80's was the time the hoi poloi was for the first time, cashed up. I remember my first property going up a 1000 pounds a months during that time.

Turban Explorer

Bought my first property - 3 bed Victorian flat on Crystal Palace Park Road with a 10% deposit from my dad for 52k in 1997. Went up to about 325k in 2007 and is now probably 250k. I think boom bust is really an accepted cycle and that sentiment is a greater driver than anyone recognises. Anyone owning property prior to the mid 2000s really cashed in.

Bermudashorts

It was the Wimbledon Village side of Wimbledon so yes the more desirable part. It was certainly tlhe going rate at the time. I am no mug.

carolinephillips

Bought our first house in 88 just before the price crash for 75k. Sold it 9 years later in much better condition than we'd bought it, for about 3k more than we'd paid, so at least we were not in negative equity, if you don't take inflation into account. Bought an end of terraced house for 110k, renovated it completely, and sold it in May 2008 for 300k. (About 25k less than it was worth, but the first person to see it bought it, cash buyer, no chain, and we sold it just before the crash) Think we have been relatively lucky, though with a $400k mortgage out here, things are not that easy on only one decent wage and my pocket money income.