This is VERY good advice

 

And then this posted 2 days later...

BBC NEWS | Business | House prices 'still accelerating'

I don't think any "experts" can predict what the **** is going to happen, a "crash" has supposedly been coming for years now.

I doubt there will be a crash as such, prices will level out and tail off a bit but I can't see a big crash coming any time soon.

Also the area does matter, some places wil be hit a lot harder imho.

Plus there is a big difference in "prices falling" and people being greedy and overpricing their properties initially. The then drop in price to make the price more realistic get's everyone saying oooh prices are going down.

 

Interesting point.

What counters that to my mind, though, is that whilst the house prices might rise in time with inflation, the size of your mortgage doesn't. So say cumulative inflation over that 12-13 year period was perhaps 60-70% (guesstimating, as average of 4% compounded over 13 years is ~66%). So in that case, whilst your house might have stayed the same value in real terms, if you took out a 100% interest only mortgage in 1979, in 1996 it would only have been a 60% mortgage. In the same 12-13 year period, you may find your salary has perhaps doubled, so that mortgage is much more affordable in relative terms. Therefore, if house price rises stay somewhere around inflation, you're generally better off getting on the ladder early. Admittedly if they bounce up and down, getting on at the bottom of the dip is always better than getting on at the top of the boom!

 

The interest rate could be thought of as inflation plus risk premium, so whilst your debt is eroded by inflation, you're paying for it in the interest rate. I think we'll have a time of catch up where inflation and interest rates are high and house price inflation is below general inflation or even negative. This is the catch up of the easy credit cycle, the bust if you like?

 

I actually clicked that link thinking no way can there be such a site...... i was right too