I bet you would earn a lot more then £200 a week now in that job
Mortgage Rate Rises
- Thread starter glenimp617
- Start date
Soldato
If it still existed, no doubt. Manufacturing / car industry though, and it's a housing estate now.
I never said it would be exactly the same, but the effects on people and society will be similar I think.
Back then there was more sag. House prices compared to wages weren't so high, so interest rates didn't have the same potency, unemployment is at much lower level, mainly not because there's lots of good jobs, but a glut of the workforce have retired and lots of **** jobs have been vacated by EU nationals. Energy prices were MUCH lower, despite us just emerging from an energy crisis. Public services were funded to an inordinately higher level back then. Even on Merseyside which started being hit by government funding cuts and private investment dropping due to electing a Militant City Council. For that, read Brexit.
People seem to oblivious to the desperation that's coming. I've lived through that once already. I can see the signs.
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Soldato
It’s hard to make a comparison on the earnings to price ratios. We have much stricter lending criteria now and the ratio between the mortgage and earnings very strictly controlled with limits on LTV. Back then you could make up your salary and I’m not sure when the 125% mortgage started but it was probably around then too.
Back then, you'd be lucky to borrow 2x your salary, never mind make it up.
The big mortgage deregulation happened mid 80s. Mainly 1983 and then again in 1986. Big lending on mortgages and the huge increases in house prices didn't really kick in until the boom in the 1990s.
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Soldato
Not surprised with the rates like they were. The affordability assessments now will be really tough on anyone getting a mortgage but back then would have been insane.
Caporegime
Vimto still gets its promo of £1 a litre so that's all what is important to me.
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Caporegime
We bought after 08 financial crash. A lot of places didn't want to lend and we were putting 25% deposit down!
I used an inflation calculator and house price valuations (both properties having been sold by whoever recently owned them in the last year so probably reasonably accurate) to compare some data points I know of to illustrate just how the insane housing market has affected affordability over time.
1979 - My father earned 30K - got an 80% LTV mortgage on a house he paid 90K for
Equivalent today would be him earning 132K but the same house is valued at 1.6m
House has gone from 3x salary to 12x equivalent salary
1998 - First wife and I earned 36K combined - got a 110% LTV on a flat we paid 83K for
Equivalent today would be earnings of 63K but the same flat is valued at 315K
Flat has gone from 2.3x earnings to 5x equivalent earnings
I recall my father once having a mortgage rate of 13% and if memory serves me correctly we were in the 5%-ish range and it was manageable but the same rates at todays equivalents are/would be so crippling. I’ve benefited from being in the housing market for a quarter of a century but feel so sorry for newer entrants, people trying to get on the ladder, the crazy way house prices have gone and the awful impacts of even small interest rate hikes.
My mother from time to time says, “You have a good job like your father, why don’t you have a nice house like we had?” or “mortgage rates were much higher in our day, why is everyone in so much trouble?” and I have to trot out this to explain the economics to her. Of course that hasn’t stopped her complaining for the last decade that her ISA doesn’t pay anywhere near what her TESSA did in the 80s!
1979 - My father earned 30K - got an 80% LTV mortgage on a house he paid 90K for
Equivalent today would be him earning 132K but the same house is valued at 1.6m
House has gone from 3x salary to 12x equivalent salary
1998 - First wife and I earned 36K combined - got a 110% LTV on a flat we paid 83K for
Equivalent today would be earnings of 63K but the same flat is valued at 315K
Flat has gone from 2.3x earnings to 5x equivalent earnings
I recall my father once having a mortgage rate of 13% and if memory serves me correctly we were in the 5%-ish range and it was manageable but the same rates at todays equivalents are/would be so crippling. I’ve benefited from being in the housing market for a quarter of a century but feel so sorry for newer entrants, people trying to get on the ladder, the crazy way house prices have gone and the awful impacts of even small interest rate hikes.
My mother from time to time says, “You have a good job like your father, why don’t you have a nice house like we had?” or “mortgage rates were much higher in our day, why is everyone in so much trouble?” and I have to trot out this to explain the economics to her. Of course that hasn’t stopped her complaining for the last decade that her ISA doesn’t pay anywhere near what her TESSA did in the 80s!
Caporegime
My mother worked 10 years of her life. Just enough to get a pension. She has everything through inheritance with her own house etc. When my parents got divorced she blew everything on holidays and material things and ended up Bankrupt in the early 00's. (My father got custody of me which can tell you everything!). She caught her pension right before the uplift so has been claiming since 60. Living in a house paid for by her fathers will. She is not educated but has had an extremely easy life. If she was of my generation she would more than likely be on the streets or living on the bread line. Her current partner who she has been with for 20 years has parents who are worth a million at least so she has that coming her way as well.
Amazing how things can change so quickly from one generation to the next.
It was mortgage regulations that precluded the banks from lending any more. Not affordability assessments.
Deregulation of the mortgage markets has been the largest driver of house prices over the last 30/40 years. It's a policy designed to transfer wealth from the lower end of the property market (mostly single property owners) to the higher and multiple property owners. It benefits nobody else other than the incidental margin made by banks who enable this transfer. That's where the slack in the housing market has gone. That's why people now pay huge amounts in mortgage payments. That's why people struggle to get on the housing ladder. Apparently there's housing shortage. Meanwhile there's nearly 250,000 properties in the UK standing empty.
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Soldato
Your Dad was well off, in 1982 just married, I earned £3500 as a draughtsman and bought a run down two bed terrace in Leigh Lancashire. It needed damp proofing, had one 13A socket for the whole of the upstairs and no kitchen and yes it cost me £13700 plus months of my time repairing refixing and rewiring. We lived in the front bedroom for six months.
Today the same house in far better nick would be £85k to £120k (rightmove). Today also yes I have gone up the ladder. But for a working man's terrace house and a bit of graft I may not have done so.
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You'd like to think so, but don't be too sure. Doesn't matter what generation you are, some people (and I wish I knew how) know how to play the system to get everything they want, without having to do anything. Makes me sick!
Run up a massive amount of debt with cars, clothes, holidays, gadgets....don't worry, there's plenty of people who will help you out to write it all off.
I'll let you into a little secret. Do you know you can steal thousands of pounds off someone and it NOT be illegal? Well you can. I'll make a detailed post about it when I can.
The VAST majority of people in this country don't give a crap about anyone but themselves. My advice is to look after yourself!
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Caporegime
People selfishly looking after themselves makes you sick, so you advise everyone to look after themselves?
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No, look after yourself but don't take advantage of anyone. Maybe a better word would have been to protect yourself. Basically don't assume everyone has the same morale compass as you, because more often than not they don't.
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Soldato
Just following up on what I ended up doing, I paid the mortgage off. With a tad under 50k remaining I'm estimating I've probably saved 5-6k in interest fees based on current rates so hopefully a good decision.
Caporegime
If you can do that, that must feel amazing. Now I suspect you would are swimming in disposable income? lol. Kidding, best to build that pot back up again, even though you can't default on the mortgage/
Soldato
Nvm
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