"The Last Crash: 1989 - 1996
It took 7 years for the crash to bottom out (B) , wiping out 30% of the price of an average home in the uk. If anyone was convinced by the government to buy on the downslope (A) they risked massive falls in the value of their homes
and also negative
equity or even
repossession! You should never buy on a downward slope as you simply don't know when you are going to hit the bottom.
This Crash: 2008 -
We have JUST started our decline this time around, the tipping point was 2008. Point (C) is the current point in our crash, the continuing black line is there for illustration as to what might happen next, based on the last crash. I am confident that we are going in to a dip, I just don't know how long or deep this crash is going to be this time around.
You can at least agree that if you buy now, you are staring in to a chasm with no idea how far you are going to fall.
When to buy:
The best time to buy is after the bottoms (B,D), but "what if you miss the bottom?" I hear you say. It does not matter! Even if you miss the bottom by 1 year, as long as you are buying on the UP slope you wont be a loser, all you have to do is monitor the data above and sit back and wait - my personal opinion is that you have at least 5 years - think of the deposit you could save!
Green shoots of recovery:
You should now understand why when the government talk about the green shoots of recovery it is a complete embarrassment. Why do the government want to trick you in to buying on to the down slope? They are not happy only with increasing your taxes to bail out the banks, they want you to also PERSONALLY sign up to massive amounts of mortgage debt to save the banks. Money , which could be better spent on your family.
We are only at point C - yet labour are actively telling people to buy before prices start going up again.
Well - now you know, the next time a politician on TV tells you to work as a mortgage slave for the rest of your life, you can tell them where to go - just keep tracking the above graph.
Obviously, please apply the above information to suit your personal circumstances. For instance, if you are David Beckham you wont need a mortgage and will be able to buy outright at any time. It's all about minimizing the amount of interest you have stolen from you by the banks
IMPORTANT. Do not let ANYONE, especial in the property industry (this includes, magazines and newspapers and some websites) tell you when the bottom is, a lot will use the language "we THINK they MAY have bottomed out".
Check the Halifax data YOURSELF!
Negative equity and many years of debt repayment should not be decided by some suits opinion." www.creditcrunch.co.uk/home/index.php
"Gdybym była lesbijką, z całą pewnością chodziłabym ze swoją partnerką, gdzie mi się podoba. A tak, to czasem chodzę ze swoim partnerem, gdzie mi się nie podoba. Siła wyższa." J.Szczepakowska