1. Sally, Stewart and their parents are moving to Australia. They need to sell their house quickly. In November 2005 they bought it for £300 000. Do you think they will sell it for more, less or the same amount? What evidence do you have to back up your thinking? The rise and fall of house prices The slump in the UK property market continued in August, with some estate agents selling fewer than one home per week in the past three months. House prices down 13% House prices falling daily Houses now worth the same as they were 3 years ago 4 bedrooms all en-suite, 3 reception, large garden, quiet cul-de-sac Must view fantastic value! £650 000 reduced to £575 000 Credit Crunch! Months House Prices

2. Why do you think Sami’s house won’t sell? Why do you think Susie’s parents can’t get a mortgage? We were hoping to move house but my mum and dad can’t get a mortgage! House sales Mortgage famine! Fewer houses are being sold now than at any time in almost 50 years, according to Government figures. Home sales at lowest for 30 years! At the moment, the lack of mortgage finance is one of the most significant factors in falling demand for housing. House sales fall to lowest level in 50 years Why? We’ve been trying to sell our house but no one wants to buy it!

3. Tom and Trudie were fortunate, their bank lent them the money to buy their first flat. The only mortgage they could have was an interest only one. Do you think they were sensible? Do they earn enough to pay the mortgage payment and have enough left to live on? Slump in new mortgages - from 102,000 in September to 88,000 in October Warning: mortgages set to be more expensive Risks grow for first-time buyers Some people opt for interest-only mortgages purely because it is cheap and they put nothing in place to pay the original price of the house. "Interest-only" means that monthly mortgage payments only go to pay off the interest on the debt.

4. Up2d8 maths Credit Crunch! Teacher Notes

5. Up2d8 maths Credit Crunch-Teacher Notes 2008 appears to be the year of the introduction of the term ‘the credit crunch’. It is a year when people can’t sell their houses, when they are unable to get mortgages as easily as they could in previous years, when prices of consumables and fuels are rising and when people find it increasingly difficult to get credit. The two page spreads presented here will provide a wealth of opportunities to create a ‘real life’ lesson or a series of lessons that fit well with the calculating and the data handling strands of the 2006 framework should you be following it. They also fit well with the element of the PFEG’s guidance for developing financial capability in KS2 which encourages the children to learn about: Other forms of money e.g. cheque books, credit and debit cards and how the payments are made in these cases Understand that cash isn’t the only way to pay for goods and services Begin to understand the concept of credit It may well be that parents or carers of some of the children in your class are trying to buy or sell houses, in which case the children will be familiar with the scenarios. As it is a news-worthy problem these days, so many others will have heard of these problems. Here are some of many possible ideas to develop with the children, that can be easily differentiated to suit Years 4 to 6, and that also provide excellent opportunities for group work:

6. 1st spread: House prices Focus on the scenario of Sally and Stewart. Look at the evidence on the spread, encouraging the children to read the news headlines, house information and graph to decide whether the family are likely to sell their house quickly and whether it will be for more/less/same as they bought it for Interpret the line graph through questioning, e.g. when were house prices at their highest, when did the downward trend begin? Establish that the graph reflects the trend of the housing market over the last three years and that prices are dropping If possible get details of houses for sale, look at their prices and work on ordering the prices and exploring place value Discuss what 13% means and work out percentages of different numbers 2nd spread: Mortgages and house sales Focus on Susie ’ s parents dilemma. Discuss mortgages, what they are, how they are obtained, paid back and interest charged Ask children to look for the evidence for why they can ’ t get a mortgage. Think about the term mortgage famine and discuss why there is one linking into the fact that banks have no money to lend Discuss the implications of this Look at the graph and work on reading, writing and ordering the numbers in thousands or as hundreds (of thousands) and explore place value

7. Extension activity– teachers guide As a start focus on Tom and Trudie. Discuss the meaning of the term first time buyers and ask them to work out what an interest only mortgage is using the information on the spread. Ask them to discuss in a small group, using the news headline information given on the spread, whether they were: fortunate to get a mortgage sensible to go for an interest only one Focus on the second question discussing such things as banks, bank accounts, income and expenditure, borrowing, paying back, overdrafts. Talk through the bank statement looking at credits and debits and ask questions related to these. Copy the question card below and give to groups of children to explore. Most people have bank accounts. This is where they can keep their money. They can use their accounts to pay for things they might want to buy. They can also use these accounts to pay bills. Can you identify the other things that Tom and Trudie have paid for? What credits were made into their account? Where do you think they work? What makes you think that? How often do they get paid? Most people have bank accounts. This is where they can keep their money. They can use their accounts to pay for things they might want to buy. They can also use these accounts to pay bills. Can you identify the other things that Tom and Trudie have paid for? What credits were made into their account? Where do you think they work? What makes you think that? How often do they get paid?