Lessons for life from the Crash of ’73

David Young, who later served in Margaret Thatcher’s cabinet and as chairman of Cable & Wireless, recalls his struggle for survival as an up-and-coming entrepreneur

There are some days you just never forget. It was Monday morning, 12 November 1973, and I was in my office at Town & City Properties in Carlton Gardens. I was a main board director and a substantial shareholder, having sold my company, Eldonwall, to Town & City some three years before.

Those years had brought about a remarkable property boom. We were already the second largest property company on the London stock exchange — but I think Barry East, the founder and chairman, wanted to be number one. The company had discovered an apparently inexhaustible source of finance and embarked on a frenetic dash for growth. We had always fully financed our developments before construction started but now we bought and bought — often, I thought, at the very top of the market. I had become so alarmed that the previous December I had a big row with Barry, went non-executive and refused to draw a salary. However, I did not sell any of my shares.

There then followed easily the worst year of my life. I had time on my hands, thought that I had accumulated enough, and started to think about public service. I had been offered, but reluctantly declined, the chairmanship of the British Rail Property Board, flirted with the thought of going back for my Masters degree, and spent a pretty aimless and depressing year. Meanwhile property prices surged. Land Securities, the largest UK property company, revalued its portfolio twice that year, first by 30 per cent and then barely five months later by a further 26 per cent. New house prices went up by half in 12 months. But the Yom Kippur war ended with oil prices quadrupling, followed by a credit squeeze with record interest rates.