Housing Market & Interest Rates

[ai_Droid]

For years and bloody years now it's been "SLOWDOWN IMMINENT!" and "PRICES MUST FALL SOON!" and "ONLY A MANIAC WOULD TAKE OUT A MORTGAGE NOW!" and folks (myself included) thought, for years, "Hmmmm yes, maybe we'd better just hang on a little while longer, surely prices will drop soon!"

 

I bought my first property for 25k in 1991, at an interest rate roughly double what it is now. My friends laughed and pointed, I was about to lose a lot of money...

 

A freind bought a place for 80k a few years later. How we laughed at him, what a loon! 80k for a detatched house in the country, nice place but still, 80k? Is he mentals?

 

It'll take something serious to damage the housing market, dont bet on it crashing any time soon.

 

While the employment market is strong, we can take a lot more interest rate hikes before the housing market will dip. Despite high prices in relation to wages, people are spending loads less of their wages on rent/mortgage and food than they were 20 years ago.

 

In short, if you can possibly afford to buy, then buy. Take the hit on the (extortionate) fees that you'll be charged for a fixed rate deal for at least three years, so you know for a fact what your repayments will be, and stop lining your landlord's pockets with thousands of pounds per year.

 

Agreed, forget a holiday a year for a few years, forget that Imprezza you had your eye on, go out once a fortnight instead of once a week, if you want a house, you can do it. Once you've struggled for a few years, it gets easier as your wages inflate but your payments stay (roughly) the same.