Does Anyone Remember 1989

[Laughing Gnome]

In 1989 at the height of the last house price bubble, the Government anounced that Mortgage Interest Releif at Source would be limited

to £30 000 per household as opposed to £30 000 per borrower.

Stupidly, they telegraphed this measure to some months after the budget. This caused a frenetic few months in the housing market and a last gasp spike in prices as couples rushed to get under the bar.

From there....... mixed reports and "false dawns" all the way down to 1996!

[Bruce Banner]

In 1989 at the height of the last house price bubble, the Government anounced that Mortgage Interest Releif at Source would be limited

to £30 000 per household as opposed to £30 000 per borrower.

Stupidly, they telegraphed this measure to some months after the budget. This caused a frenetic few months in the housing market and a last gasp spike in prices as couples rushed to get under the bar.

From there....... mixed reports and "false dawns" all the way down to 1996!

Yes, I paid off my small outstanding mortgage immediately.

[Pent Up]

In 1989 at the height of the last house price bubble, the Government anounced that Mortgage Interest Releif at Source would be limited

to £30 000 per household as opposed to £30 000 per borrower.

Stupidly, they telegraphed this measure to some months after the budget. This caused a frenetic few months in the housing market and a last gasp spike in prices as couples rushed to get under the bar.

From there....... mixed reports and "false dawns" all the way down to 1996!

I think I must have been watching Thomas the tank engine while all that was happening...

[Laughing Gnome]

I think I must have been watching Thomas the tank engine while all that was happening...

You lucky fella!

Anyway, reason I bring it up is, we have another telegraphed change in the tax regime regarding CGT.

Perhaps this will mark the real tipping point, after all the restriction of MIRAS was not the cause of the last housepricecrash

but it seemed to me to precipitate it.

[Bruce Banner]

I think I must have been watching Thomas the tank engine while all that was happening...

I preferred "The Clangers", that was 1969, we all used to dash back from the pub on a Sunday afternoon to watch it .

[JustYield]

How quaint - interest relief.

What's needed now is capital relief. Capital Relief at Source (Houses).

[Georgia O'Keeffe]

I think I must have been watching Thomas the tank engine while all that was happening...

This remains vivid for me i remember a group of us being out on the climbing frame at the time of the announcement and we were so shocked by the news at least two of us fell off

[Guest DissipatedYouthIsValuable]

My parents had free university education AND mortgage interest relief?

Will swap for iPod and Reality TV.

[Bloo Loo]

My parents had free university education AND mortgage interest relief?

Will swap for iPod and Reality TV.

yeah but, they didnt have 1 in 4 people employed by the state, and the ones that were, were poorly paid.

and they could get a job without any qualifications.

now you need a degree to be a van driver.

[Bruce Banner]

yeah but, they didnt have 1 in 4 people employed by the state, and the ones that were, were poorly paid.

and they could get a job without any qualifications.

now you need a degree to be a van driver.

Very true. I left school at 15 because I was bored with it.

[dissident junk]

My parents sold their house in '89, and I remember, at the time, my dad was being weird about selling (he told me a few months ago that he had a bad time over those IR rises in the late 70s/early 80s but never told my mother about it, which was probably the reason why he didn't want to add to their mortgage) but my mum stamped her foot and stated that it was "now or never" because they would get stuck in the old property because of a change in something by the government.

[Guest DissipatedYouthIsValuable]

yeah but, they didnt have 1 in 4 people employed by the state, and the ones that were, were poorly paid.

and they could get a job without any qualifications.

now you need a degree to be a van driver.

50% higher education rates have produced an enormous Keynesian boost to the beer and Pot Noodle industries though.

[miko]

In 1989 at the height of the last house price bubble, the Government anounced that Mortgage Interest Releif at Source would be limited

to £30 000 per household as opposed to £30 000 per borrower.

Stupidly, they telegraphed this measure to some months after the budget. This caused a frenetic few months in the housing market and a last gasp spike in prices as couples rushed to get under the bar.

From there....... mixed reports and "false dawns" all the way down to 1996!

It was 88 not 89 , and as the frenctic rushed out to purchase interest rates dropped to their lowest for years. For a short period in may 88 they dropped down to 7.5% rising straight afterwards by novemeber they were 13% . New buyers who had mortgaged as far as they could saw their repayments nearly double overnight. A year later they were 15% and stayed that high for a year.

A few years later I saw Nigel Lawson on question time and he was questiond why they had not knocked double miras on the head immidiatly and would not have caused the rush . He replied that they could not as the tax office and building societies said the systems were not in place to do this and needed time to get their paper work in order to accomadate it.

What a crock of s--t answer, prior to double miras being scrapped whether you were single or married and getting single miras, or living together and getting double the miras form was the same you just ticked a different box.

Over the years when watching QT , there have been many times when i wanted to be in the audience and make a point , but that statment from NL, must be the one where more than any other I wanted to be there and answer someone on the panel.

My answer would have been. " Mr lawson you are lying or the building societys and tax office lied to you , if that is the case that they said that and you believed them then you are stupid no wonder the countrys finances got into such a state with you as chancellor.

Edited May 22, 2010 by miko

[newbonic]

I remember that well. I bought my 1st house in 1988, and it was a frenzied market with bidding wars, gazumping, the works. It was 1995 before I was back in +ve equity! Not that it mattered as I had no intention of selling.

I knew a few folk who had their houses repossessed in the early 90s as a result of that crash, and the fundamentals were nowhere near as bad as they are right now.

[landlessgentry]

I was 15 at the time and the folks wanted to buy a nice 4 bed detached house in a more affluent part of Croydon (yeah I know), But this was in Sanderstead.

Asking price (August 1989) £215,000

Dad offered £180,000

Estate agent scoffed

Summer 1990: Still on the market @ £159,950

Freaked out by all the bad news so withdrew.

Sad how I remember these things, but it has made me the bear that I am today.

Edited May 22, 2010 by landlessgentry

[The Bull Trap]

I think I must have been watching Thomas the tank engine while all that was happening...

Me too mate - Ah, happier days...

[Roman Roady]

The MIRAS of '88 was the first thing that went through my mind when I heard the CGT proposal.

I was in my early 20's when this happened and I clearly remember the stampede that followed.

[xux42]

The MIRAS of '88 was the first thing that went through my mind when I heard the CGT proposal.

I was in my early 20's when this happened and I clearly remember the stampede that followed.

It wasn't just double MIRAS - although that was a popular choice for obvious reasons.

There were cases of up to 10 strangers getting together to buy whopping places each bringing a MIRAS allowance to the deal.

Imagine the bunfights later on when MIRAS Towers plummeted from £300K to £180K....

[Roman Roady]

another good thread about this era is in The Classics. I can recommend reading Serpico"s posts to get the real fear that was generated by the banks.

http://www.housepricecrash.co.uk/forum/index.php?showtopic=35126

doccyboy...great taste in posts!

Ive bumped this one before..Serpico's posts are collectively some of the best on this site, second only to this one IMHO:

http://www.housepricecrash.co.uk/forum/index.php?showtopic=53593

fofp's opening in Aug 2007 still governs my overall opinion of what is still to be delivered from the 'recovereh'.

He saw it all coming.

[porca misèria]

Anyway, reason I bring it up is, we have another telegraphed change in the tax regime regarding CGT.

Perhaps this will mark the real tipping point, after all the restriction of MIRAS was not the cause of the last housepricecrash

but it seemed to me to precipitate it.

Not comparable.

MIRAS was long-term and affected viability of a purchase. My brother and his then-fiancee were one couple who bought just before the change (and had difficulties over the mortgage when they split up). CGT by contrast is a one-off, and only affects those who've made substantial profits: it's a business decision rather than a life-changing can-we-afford-a-home one.