So, it's all a bit emotional now on the housing market?
I’m unsure what concerns me more; the fact that we all seem so upset that it has happened, or that those who caused it still appear blissfully unaware as to what happened and why it did happen ... again!
In my humble opinion the "why" came down to those bankers again. They allowed and in some cases still do allow people to take mortgages of up to ten times their annual incomes.
Question: Why do we put these people; fresh out of college and with no life experience, into these positions that can contribute to devastating the world economy? Did nobody think to tell them exactly the same thing started in 1990 (only 19 years ago) when loans of 3.5 times people’s income ended up putting the UK housing market in disarray for nearly a decade?
I’m almost thankful for being a victim of the housing market crash last time around. In 1990, having neither benefitted in equity during the housing boom nor been afforded the opportunity to spend like a lunatic on things I couldn’t afford nor have to remortgage several times over to pay it all back, I do feel quite humbled.
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The good news is, despite what all the pundits are saying now, in 20 years or so we will more than likely be back to yesterday’s prices, but possibly talking about the housing market the "next time" it has all gone desperately wrong. Perhaps we will be better prepared, but then again, history has a habit of repeating itself, so don’t hold your breath!
Unfortunately or fortunately for me, having been outside of the
housing market since the last crash, I find myself paying substantially more money in rent for the house which I can currently only aspire to own, than I would if I had a
mortgage. Why? Because despite the fact that being on the
housing market for me would substantially reduce my monthly outgoings, I can’t persuade any of the banks to lend me a dime ... which I see as Irony at its best!
To explain my last statement for those of you whom are looking dismayed and considering that I may appear to be "one sandwich short of a picnic", to own a house which in normal terms would be an investment and make great long term gain for me, would be cheaper than to give my respected landlords the money, who in turn live a much better life in Monaco whilst I pay their mortgage and probably their living costs too.
Thankfully, for as long as my landlords are content in Monaco, I am content living in their
fabulous house ... albeit some may consider quite correctly I am pouring my money away.
Bankers, I hope you are taking notes.
The housing market is indeed a funny old business, but what people need to be aware of, is that for as long as it is cheaper to buy than rent, unless there are strong ulterior motives not to buy then people should.
The problem of a crash should only come to those who have either overspent, speculated simply for gain or simply need to move for whatever reason and can’t rejoin the market.
I do sincerely sympathise with the victims of this
housing market crash, I know from personal experience that it can be a devastating position in which to find yourself, and have more widespread implications than just those of finances, but what I would like to stress is that it will get better; The population grows and as it does more
housing is required, people have families and need to upsize, new people leave home and come onto the housing market etc ... but things will and are going down whilst the balance of prices is effectively reset. Once we have established the "real"
value of housing again, things will more than likely, albeit cautiously, return to normal, and in these interim times we just all need to take care of ourselves, those around us and wait for the world, and in particularly those bankers to catch us all up again.