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Dreams are funny shit…

I’m driving down the road, looking into the sunset, and remembering the dream I was having when I woke up that morning.

So in this dream I have gone back to a house I used to live in, and in the interim the village has changed, some houses have disappeared, some new houses have been built, and in the back yard of where I used to live someone split the house from the yard, property wise, and built four horrible art deco style townhouses, and it looks like it should be a studio set or a record album cover.

Someone beside me says “Yeah, those houses have been empty since they were built 27 years ago“… and at that point I wake up and the alarm is going and it is time for me to move my ass.

So 10 hours driving later this “…empty since they were built 27 years ago..” is still floating around at the back of my head, and I start doing mental arithmetic, and realise after a few minutes of that would have been in 1980, so that means that that would have been 1982, so sort of stuff, and I come to the conclusion that I left that house with the big back yard, wait for it, 27 years ago now.

So my fictitious characters in dreams have instant access to facts that I, in my awake state, have to sit and think about, not something new as revelations go, but this one struck me, because it struck me how much the world fucking changed in that period.

27 years ago was 1985.

The big house with the huge yard set in the idyllic countryside was UK £25,000 on an 8% mortgage from NatWest, which at the time my bank, Midland, manager called “financial suicide” on the part of NatWest, so banks were changed, mortgages taken and property deeds altered.

Back then the multiple was 4 x your salary, I can’t remember car prices but I can remember NOT buying a new with dealer miles MHR Ducati Mille Miglia for £4,500 (which gives you some idea of house prices relative to top of the line bike prices) because that and £500 gave me the 20% deposit of £5,000 on the house, which allowed me to sneak under the mortgage multiplier of 4 x with my £5,000 salary, or approximately £100 a week.

I can tell you that £100 a week wasn’t an especially good wage for 1985, remember I was more interested in partying evening and weekends, and would never have considered overtime or anything like that. From memory the dole was about £25 a week at that time.

I can tell you that is was five short years from 1979 when my dad said he would “stop driving when petrol got to one pound a gallon” and there we were five short years later in 1985 (forgive my maths) and there it was just about to go through two pounds a gallon.

(today at £1.44 per litre and 4.54 litres to the (imperial) gallon it is £6.54 per gallon)

I can particularly remember this as on the last trip up to see the MHR before I passed on it, I stopped to fill the twin tanks on the old shovel, it was on reserve and I handed over a TENNER and got some change, and the guy pumping fuel (manned pumps still in 1985) said “come next year it will cost you more than a tenner” (to fill that motorcycle up with fuel…) which was insane… I only earned £100 a week before tax…. and here I was splashing £10 into a motorcycle to fill up dry tanks!

Here is another way to look at it… in terms of gallons of petrol…

In 1985;

• I earned 50 gallons of petrol a week before tax
• A top of the range exotic sportsbike cost 2,250 gallons
• A LARGE house with a LARGE yard in the country cost 12,500 gallons

So lets take our £6.54 gallon and work that backwards;

• A mid twenties guy should have no problem finding a job that pays £6.50 x 50 = £325 a week, no overtime, no nothing, £325 a week is £17k per annum, local city bus drivers make that, just, if they work overtime…. so by any meaningful metric wages today are 25% to 50% lower in gallon of gas terms than they were in 1985… the average weekly wage is nearer 250, which at £6.50 a gallon = 39 gallons of gas
• A top of the range sportsbike £6.50 x 2,250 = £14,625, closest my local dealer, the same one I was going to buy the MHR from back then, has on their website price wise is a 2013 Kawasaki VN1700 Voyager custom at £14,599… a 2012 VMAX is £21,499, so we aren’t a million miles away really.
• A LARGE house with a LARGE yard, £6.50 x 12,500 = £81.250…. this is where it gets fucked.

The actual house in question, you can go there today and and see not four art deco creations in the back yard, but one large detached freehold, which according to http://www.nethouseprices.com sold in April 2009 for £325,000…. the original house, now minus the huge yard because the above mentioned extended £325k place with outbuilding was build in it, so it now only has a moderate but still large by UK standard 1/8th acre garden sold in June 2011 for £277,000

You have to remember that while what I did in 1985 was just about financially doable, it was considered by my own bank manager to be, and I quote, “financial suicide” on the part of the lenders, NatWest, and myself, racking up that much (£20k, I had £5k deposit) debt to buy a big house in the country.

There is a sound reason for referring all these things back to the gallon of gas / benzine / petrol / essence / whatever…. and that is that a gallon of gas = a pretty much fixed quantity of energy, and energy is the lifeblood of a modern technological society.

That house with that land (eg building plot) has to be what the house went for in June 2011, which is 277k, plus minimum 100k for the plot the 325k house and outbuildings now sits on, plus 20k for the long strip of land sold the other side to give access to the land at the bottom, which was never ours, but which now has yet another executive house built on it, so 277 + 100 + 20 = 397 lets not mess around and round it up to 400k

It is also worth noting that in 1985 this house cost 12,500 gallons of gas, today £400k / £6.50 = 61,538 gallons of gas…. 61,538 / 12,500 = 4.92, call it five times the fucking price in energy terms.

£400,000, now I had a 20% deposit and took a mortgage for the remaining 80%, today that would represent a £80k CASH deposit and a mortgage for the remaining £320k….. like fuck, what mid twenties guy has that kind of loose lying around today.

We have already seen that if you are prepared to put in the overtime, our modern mid twenties guy can drive a city bus and pull in £17k…. 320/17 = an 18.82 times multiple, get a liar loan for the full 400k and 400 / 17 = 23.53 times multiple.

WHAT THE FUCK HAPPENED?

We went from a 4x multiple, which my bank manager said was financial suicide, but hey, it was my funeral, to buy a house worth 12,500 gallons of gas, to the EXACT SAME MOTHERFUCKING HOUSE now costing 61,538 gallons of gas.

So financial suicide for FIVE GUYS IN THEIR TWENTIES WORKING AS A TEAM.

But wait, there is more.

While I looooove my technology and teh intertubez and my mega LED flat screen and 1080p HD did-yit-all moovie cameras and all that shit, all that shit didn’t exist commercially in 1985, you could spend half a weeks wages on a Sinclair 8 bit micro, you could spend a lot of money on Hi-Fi, you could buy a stupidly big 26″ colour telly… monthly bills were pretty much landline phone rental plus light and heat… there just wasn’t anything else.

Credit cards were also very rare, as indeed were debit cards.

People who travelled to foreign countries or worked abroad might tote a Diners Club and an AMEX card, they might, emphasis on might, most didn’t.

Mostly you wrote a cheque or paid cash.

Cash was king, because everyone had the legal right to be paid weekly in cash, and 80% of the population was, and if you are in ANY doubt that removing that legal right (Thatcher government) was anything other than a planned and necessary step on the road to personal credit / debt for everyone then you too are fucking dreaming of 1985…

A £20,000 mortgage for 20 years at 8% interest is £169.75 a month, getting on towards HALF of my gross wage in 1985….

IF I had stuck it, and all other things being equal, which is by no means certain, I would have been mortgage free seven years ago…. and my last year of mortgage payments would have been 2005, and a mortgage of some 40 quid a week in 2005 would have been peanuts…. especially compared to the new “Council tax” which in reality is something you pay in exchange for getting your bins emptied once a week, and for that house, which was LARGE, the council tax in that area is £2,200 a year, or £42 a fucking week.

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The present financial “dreamworld” that we live in is however anything but a dream, no fucker is going to wake up from this and idly run things through their head behind the wheel many hours later with mild amusement.

So far we have been inflating things in terms of a gallon of gas, when the wheels fall of that wagon and the actual cost of a gallon of gas doubles in five years, then doubles again in another five, which is what happened 27 years ago, all sorts of bed dreams and evil spirits come home to roost.

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