My mother took out a mortgage in 1990 when the Bank of England base rate hit 14%.
The mortgage rate was just over 16%. Everyone thought she was crazy.
The real estate market was beginning to collapse; she was a single mother on a four-figure, part-time annual salary, and child support was sporadic at best, non-existent at worst.
I didn’t think much about it at the time; I was caught up in the excitement of finally being able to have my own bedroom at 12, rather than sharing my mother’s. All my friends had their own room.
But I vividly remember what it took for her to get on the property ladder, and I remember being forced into it, basically.
In a “past life” she had worked for The Prudential, and as a former employee she had been allowed to rent a small apartment above a store almost in perpetuity. Except that the real estate crash of the 1990s was imminent and the Pru wanted to clean up his portfolio of residential properties.
She advised us in the late 1980s – 1989, I believe – that she intended to sell the properties to a developer. This gave my mom no choice but to see what was on the market and what was close enough to my school.
“We need to get on the housing ladder,” she told me, as she rummaged under the old white DIY cupboard for her meager savings.
Just a few hundred pounds, which she had collected from the alimony she received or from the sale of her jewelery and her little treasures.
I had no idea what a housing ladder was. Honestly, I thought it was those fire escapes from West Side Story, and I said something along those lines.
“You buy a house when you can, and over time most houses will go up in price,” she explained.
“But they’re going down – the news said so.”
“And that’s why we have to buy now. I could never afford it any other way.”
“But the news says the mortgage is too expensive.” (She encouraged me to watch the BBC news at 6 p.m. every night).
She handed me the envelope – I had never seen £20 notes before. It must have been around £400 or more.
“But the same rates that make mortgages expensive mean interest rates are also high on savings. So we put that at the Abbey in a savings account and then it will increase on its own through the rising interest rates.”
I wasn’t very good at math, but I understood the concept of growing money. She pulled out some notes. “It’s our tithe – it will go to the poor and the Children’s Society. The rest will go to the Abbey.”