House prices cannot "recover", simple common sense!

Welshwoofs

dopester wrote: »

Anyway, what did your Mum do with the money? Did she buy again to downsize or is she perhaps STR (renting)?

Yup! Sure as sheet

It needed a lot of work done on it when she bought it, she also spent £50k on an extension and turned the 150ft garden from a wilderness into an amazing space (she was a garden designer). It's also in an area which has become highly sought after in the last 20 years.

What did she do with the money? Bought a small house to live in herself and bought a classic 'worst house in best street' to do up recently.

Thrugelmir

Max_Headroom wrote: »

One answer. Basically a whole raft of "clever" ways to lend Joe Public more and more, irrespective of whether he could afford it.

Self Certification, higher multiples, interest only, etc etc.

The only thing they never managed to work out was a clever way for him to pay it back.

Nett result: In many cases he couldn't, hence the mess we're in now, and hence why house prices cannot reach the previous dizzy heights (unless wages go up a lot, which doesn't feel too likely looking at the current economic situation).

All of which is pretty much where I came in with my first post. Which is that from a common sense perspective it's impossible for house prices to "bounce back" to where they were, because it was never sustainable for the general public to be able to manage the kind of debt that supported these sorts of values.

Spot on Max. Agree with your comments.