Anyone there, old enough to remember 1988-1991 as an adult?

I have just read:

You have to remember that this was a totally different set of circumstances to today, part of the motivation behind the MPC was to stop things like this happening again and that has brought a lot of stability to the housing market.
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I wish I had your confidence - maybe you are right that house prices will rise by 5-10% every year...forever.

As I don't have any experience I was just wondering whether the same discussion already existed 20 or 30 years ago when people also thought this is a safe business and suddenly the prices went down.



Just imagine someone bought a house in 1988....and got a mortgage....then he/she was probably f***ed in 1995 if they had to sell the house.

But even if the graph reaches a stable growth of only 3% some people would be in trouble that already calculated with an annual rise of 5,6,7 or 8%.

Or look at the mortgage rates. They have been at 10% in the past. So just imagine it reaches 8% again....and people need to remortgage so that they can not afford the rates anymore - they are forced to sell. If lots of people are forced to sell there is a lack of demand and house prices fall.

I don't believe they will continue rising as heavily as they have done recently... forever, I just don't believe they will 'crash'. They might drop, in fact they probably will, and already have in some areas, but not to the crippling levels they did in the late 80's that caused the cascade effect that you are mentioning.
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Yes house prices are due for the big drop anytime soon. The house price crash of 1991 followed several years of steady rises in house prices. The same thing has been happening for the past ten years with in slight drops of a few per cent during that time.

Have a look here:




So it was even at 18% !!!

Just imagine it is back at 10%.

So, on the savings account you get a lot of money. Borrowing mony is quite expensive then - so renting would be cheaper and hardly anyone would buy anymore.

I was working in an estate agents in '88, i was only a kid and remember the threat of welsh letter bomb attacks.

ahhh, forgot to mention that we were not far from the welsh border and it was all about the english buying up homes for holiday homes in Wales.