Jump to content
House Price Crash Forum
Sign in to follow this  
Casual Observer

Ratio Of Equity To Income

Recommended Posts

Today I got to thinking about the amount of equity i have had in housing since I first bought in 1975, and it's relativity to my annual income. This ought to provide some kind of indication about the financial sense of buying property.

At the foot of the last crash, in 1994, I sold my house for 98k, and traded up. This meant I carried forward equity of 70k (98k minus outstanding mortgage) which was just less than twice the annual salary I was on. I remember thinking that this wasn't a tremendously brilliant achievement after 19 years on the housing ladder, especially in light of all the booms we'd been through.

Since we're now at a peak in the cycle, my ratio of equity to income (which, with age is much higher) is now about 6. But I wonder what it will be in 5 years time (assuming I'm still earning)

I'm not sure whether there's anything in this, or what others' experience is. I suppose the main message for me is that, after the last crash housing had proven to be a good, but not spectacular, long term investment.

Any thoughts?

Edited by Casual Observer

Share this post


Link to post
Share on other sites

Just think hey, in 1995 I started with 2,700 pounds & look where I am (see Smell The Fears sig for close enough numbers). You were there with 70k 1 year before me and could have exceeded what I've done.

Life is for the taking. I'm not having a personal jibe at you, but I would like to point out for the younger posters that the decisions we make now, impact on us later. So make the right decisions.

Share this post


Link to post
Share on other sites
I would like to point out for the younger posters that the decisions we make now, impact on us later. So make the right decisions.

Indeed. All the younger posters should follow your example, and buy their first house at the bottom of the market, not the top.

Share this post


Link to post
Share on other sites

Just think hey, in 1995 I started with 2,700 pounds & look where I am (see Smell The Fears sig for close enough numbers). You were there with 70k 1 year before me and could have exceeded what I've done.

Life is for the taking. I'm not having a personal jibe at you, but I would like to point out for the younger posters that the decisions we make now, impact on us later. So make the right decisions.

You need to get out now. You are sentimentally attached to your assets. You must realise this by now?

Just think if you step out pre dive you will be able to re-enter the market and buy up much more property with lower overheads in the form of smaller mortgages.

Unless of course you think there is an infinite amount of money to be leant. In which case we are all trillionaires anyway.

Share this post


Link to post
Share on other sites

Just think hey, in 1995 I started with 2,700 pounds & look where I am (see Smell The Fears sig for close enough numbers). You were there with 70k 1 year before me and could have exceeded what I've done.

Life is for the taking. I'm not having a personal jibe at you, but I would like to point out for the younger posters that the decisions we make now, impact on us later. So make the right decisions.

I've seen the figures. I do have more than you. But not in property, and not dependant on loans.

And my family house is probably better than yours.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.