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>> http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php
>>
>
> Looks like it's approximately following the curve to me
The curve is just the trend-line of the underlying data (the blue bit) -
the Y axis is inflation-adjusted house prices, so if house prices only
went up with inflation the graph would be flat. Who knows what will
happen over the next 2 or 3 decades though - the main thing is if you
own a house it doesn't matter too much because it's something most
people need.
> Yeah, but you can say that about most things just because of inflation.
> There was a time where you could buy an entire house - even a giant
> mansion - for less than £1,000, because that was a huge sum of money
> back then. ;-)
Not as huge as it is today though, that's the point. 40 years ago a
young couple with decent jobs had an annual salary about what a small
house costs. Today a young couple with decent jobs are earning about a
factor of 5 lower than what a small house costs.
> From what I've seen, renting is drastically more expensive. If I want
> to borrow £100k, that's £600/month. If I want to rent somewhere, prices
> start at £800/month or so.
£800/month to rent a place that costs only £100k seems very steep to me.
The house I rented for £700/month would have sold for about £180k
(costing me about £1000/month in mortgage).
If I decided to buy that house rather than continue renting, 20 years
later I would have saved £350/month (assuming £50/month for repairs and
maintenance, which is probably an underestimate) then I'd have about
£120K cash. So it comes down to whether the house is worth more or less
than £120k, if it's going to be worth more than £120k you're better off
getting a mortgage - which I think you can almost guarantee it will be.
Even if you do nothing to the house in 20 years it will surely be worth
more than that.
> You forget that for the last 10 years, my salary has remained almost
> totally static.
That's not normal though...
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