Actually
that's not quite true.

The real trouble starts when interest rates rise.

Someone today buys a house which will cost them £1,000/month - you assume they can afford £1,000/month. Doesn't matter if the value of their house falls, so long as they can pay the £1,000, they can just sit it out.

But when interest rates rise, and they suddenly need £1,500/month, and haven't got it, then the shit hits the fan. That's when people start losing their homes, and walk away peniless at best.

That's a real risk now. Interest rates are as low as they have ever been. If rates were to rise to where they were 15 years ago, your £1,000/month now would be more like £2,500 - 3,000.
(username failed moderation, Thu 20 Oct 2011, 10:26, 1 reply)

That’s the outcome of people jumping into a rapidly inflating housing market and taking a gamble.
( Ring Of Fire A petty, drooling belming butthurt retard., Thu 20 Oct 2011, 11:24, closed)

It's cetainly clear
that this cycle always makes some people money, and always ends up in a bubble where the tailenders get royally shafted.

I wouldn't argue in favour of ever increasing house prices, but it's a market - not any conscious policy. It drives itself.
(username failed moderation, Thu 20 Oct 2011, 11:30, closed)