This week, it’s 2008.
- Average house price: £158,442
- Base rate at year-end: 2.0%
- House price inflation: -15.9%
- General inflation: 2.8%
- Oscar Best Picture winner: Slumdog Millionaire
- Best-selling album: Rockferry, Duffy
- Must-have Christmas toy: Ben 10 action figures
- Christmas number one: Alexandra Burke, Hallelujah
Mortgage/housing market highlights
More a year of lowlights as the UK mortgage sector followed the global market towards the abyss. Mortgage funding lines dried up as revelations abounded regarding the sub-prime debacle in the US. The millions of dollars lent to so-called ‘ninja’ borrowers (those with No Job, No Income, No Assets) in the US shook confidence in the securitisation markets worldwide, which simply closed for business.
In the UK, sub-prime mortgage lenders closed down like dominoes, and even the established players such as Kensington were forced to temporarily close to new business as they simply could not secure enough funding to support new lending.
In April, Moneyfacts reported that 20% of all UK mortgage deals had been pulled from the market in the space of a week, as the lending drought set in, and Nationwide recorded the first fall in house prices in 12 years.
The Bank of England started cutting interest rates to ease the market, but with little impact. Housebuilders started reporting large falls in profits.
In September the decision was made not to bail out Lehman Brothers, and the global bank collapsed spectacularly, arguably compounding the problem of a huge lack of confidence in the world’s economic systems.
This year’s highlights
9 January – The price of petrol reaches $100 a barrel for the first time ever.
21 January – Global stock markets, including London’s FTSE 100, register their biggest falls since 11 September 2001.
17 February – the government announces that Northern Rock is to be nationalised.
24 February – Fidel Castro resigns as President of Cuba.
7 April – Last 100% mortgage withdrawn from the UK market.
21 April – The Bank of England announces a £50bn plan to help credit-squeezed banks by allowing them to swap potentially risky mortgage debts for secure government bonds.
7 May – Dmitry Medvedev becomes President of Russia, taking over from Vladimir Putin.
27 June – Bill Gates steps down from his daily duties as chairman of Microsoft after 30 years, to concentrate on philanthropy.
8 August to 24 August – The 2008 Summer Olympics take place in Beijing, China.
7 September –Fannie Mae and Freddie Mac –lenders which account for nearly half of the outstanding mortgages in the US – are rescued by the US government in one of the largest bailouts in US history.
17 September – Lloyds TSB announces a £12bn takeover of HBOS, the UK’s biggest mortgage lender Britain’s biggest mortgage lender following a run on HBOS shares.
21 October – The Large Hadron Collider (LHC) is officially inaugurated, a collaboration of over 10,000 scientists and engineers from over 100 countries.
4 November – Democratic US Senator Barack Obama is elected the 44th President of the United States, and becomes the first African-American President-elect.
6 November – The Bank of England cuts interest rates from 4.5% to 3% – the lowest level since 1955.
11 November – The QE2 departs on her last voyage from Southampton to Dubai, where she becomes a hotel.
11 December – Bernard Madoff is arrested in the US for running a huge Ponzi scheme, defrauding thousands of investors – the largest financial fraud in history.
31 December – The FTSE 100 closes down 31.3% on the year – the biggest annual fall in the index’s 24 year history.
