Quote:
Originally Posted by Ianto.W.
The people that were caught in the equity trap borrowed dear money, interest rates are as low as they have been in my lifetime, in 1964 they were 5/6 per cent it will never get any lower. Thatcher fueled inflation by incerasing interest rates, the only danger facing us at present is the easy to obtain credit cards with ridiculous rates of interest ie apr 29 per cent, mortgage money at 7/8 per cent is cheap, but as willow said if you buy the correct type of property 'not this modern wood framed crap' it will retain it's value through thick and thin times. If you sit on your backside worrying about crashes and failures you should not join the ranks of house ownership or go into business, be a nearly man instead.
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That's fine, if yout property is worth the same, or more than you took out a mortgage on it for, or if you plan to stay in the property long term.
When I first bought after the last crash, lots of my friends were in negative equity, and couldn't afford to sell sell. They just had to sit and wait for the value of their property to rise again to what they paid for it.
Some wanted to move because they'd got other jobs. Some because they now had children and were in a one bedroom flat. One couple I knew got divorced, but still had to live together because they couldn't afford to sell and split the cash from their property, because there wasn't any.