Monday, July 31, 2006
House price crash? I hope so
When we bought our first flat in 1998, it cost us £99,950. At the time I thought it was a huge amount of money and I thought house prices couldn't rise any more. How wrong I was. Two years later we sold it for £175,000 and bought our current house for £220,000. Again I thought house prices couldn't rise any further and again I was way off the mark. In both cases I wasn't particularly concerned with house prices, since I never thought of buying a house as an investment but rather somewhere to live. Buying was (and still is) cheaper than renting for us since we were lucky enough to buy at a good time. Now our house is worth over £300,000 and by all accounts still rising, although the price rises have certainly slowed down. If we were starting over and looking to buy a place now we couldn't afford to, certainly not where we bought our first flat. I do wonder who can afford to buy somewhere now. But rising prices don't help us either. If we ever did want to move house, chances are anywhere we bought would be over the magic £250,000 mark, meaning our fees would be about £10,000. I can think of lots of things I could do with £10,000 and handing it over to the government doesn't seem the most appealing option. The guys at House Price Crash have been predicting a crash for some time, but they are still waiting for it to happen. The sooner the better as far as I'm concerned.