It’s been ten years since the financial crisis began. The “credit crunch”, as it came to be known, triggered the biggest recession since the second world war.

FactCheck looks at three ways millennials are feeling the effects of the crash.

1. You probably can’t get a mortgage…

The credit crunch was triggered by the so-called “subprime” mortgage problem in the US. In the early 2000s, banks were lending money to people who couldn’t afford the repayments – and packaging up these bad loans to sell on quickly to other banks. Eventually, billions of pounds of toxic debt was swirling round the global financial markets.

It took a while for anyone to notice what was going on, but when they did, banks across the world started to panic. They were suddenly strapped for cash and became extremely unwilling to lend to anyone else.

In 2006, before anyone realised the extent of the subprime problem, UK banks approved around 1.4 million mortgages for home buyers. By 2008, when the crisis had taken hold, that figure was just over 500,000. Since then, mortgage approval rates have slowly crept up, but they’re nowhere near their pre-crash levels.

And it was young people who took the biggest hit:

The number of first time buyers getting mortgages fell by 47 per cent in just one year between 2007 and 2008.

The percentage of people aged 16 to 34 that own a home has been falling since 1991, but fell steeply between 2001 and 2013.



2. Partly because your wages haven’t grown as much.

It’s not just tighter lending rules from banks that have made it difficult to get a mortgage: earnings also took a hit. Before the crisis took hold, the average Brit took home the equivalent of £570 a week in today’s prices.

After the crash, pay fell significantly, finally hitting a low of just under £520 a week in 2014.

Even today, the average person earns £30 a week less as a result of the financial crisis.

Wage rate growth plummeted after the crash. In the early 2000s, the average pay packet was expanding by between 3 and 7 per cent a year.

But after the crisis took hold in 2008, wage growth was 2.9 per cent, and plunged even further to just 0.2 per cent in 2009. They’ve grown since then, but have yet to fully recover.

3. And if you’re lucky enough to be a homeowner, the value of your house is lower now than it would have been

The bottom dropped out of the housing market as a result of the credit crunch. After years of house price rises, the average UK home was actually losing value by 2008.

The market rallied during 2009 and 2010, in part because banks were reassured by the actions of governments and regulators to stabilise the financial system.

But there have been a few rocky periods since then: 2011 saw a brief return to the dreaded negative growth in house prices.

Today, the average home is gaining value each year, but at a lower rate than it was before the crisis. It took until 2014 for the average house price to return to its pre-crash peak. So while house prices are going up, seven years of the last decade were spent regaining value lost in the crisis.