When is the right time to buy..

_bankrupted

As a comparison of today (or this peak) compared to the last one (for those not around at the time here is my experience)

In '87, 2 years out college with 3 good A levels I was working for the MOD and earning £6000 a year. I joined 18 months earlier on £4016 !!! Ok not great but that is Government salary. My sister bought her first home in '86 a 2 bed Charles Church mid terrace in the SE. She paid around £55,000, 10 times my salary! Interest rates were 8%. I was also working, living in the SE

'87 I went to university and finding myself out of halls in the second year I bought a house with a friend. The Halifax lent 2 students, with no income £30k We put a £4k deposit down and Parents acted as guarantors. Interest rates were 10% when we completed and 15% when we sold 2 years later.

So houses were expensive and at a multiple of salaries equivalent of today (of course varies depending where you live). Banks lent money to anyone, even the unemployed. The debt repayment on the loan was extremely high due to the interest rate, much higher than today.

So it's not really surprising that there was a crash when the economy turned sour.

It's almost the same story over again, but this time interest rates are significantly lower.

So why do people think this time around it's much much worse?

dopester

spuds wrote: »

If you really want to own your own home, it makes sense to buy when the mortgage payment is cheaper than the rent.

It might be difficult to comprehend, but rent values are set to crash hard as well during the next 4 years.