House prices and the joy of owning

Just to make the whole collapse of the global economy and nosedive in house prices in the UK a little bit more personal, I decided to buy a flat right at the peak of the market. I watched carefully over years, trying to decide when exactly we'd reach the top of the hill and to ensure the maximum pain dived into the market in Q3 2007. If only I'd let the rest of the world know, they'd have been able to time the crash off my completing on my house purchase.

Now, having restructured the mortgage, rented the apartment and moved into a larger place due to the arrival of a little one, it is not a good idea to be looking at average house price falls across the UK. The latest Nationwide house price index report has the annual fall for April 08 to April 09 as 15%. Joy. Looking further in provides some sobering context. The long term trend increase in house prices over the past 20 years (according to their index) is 2.9% and with the recent falls we're about to be back on the trend line for the average house price in the UK. That doesn't mean the falls will halt, we'll probably go below the trend line before climbing back up and over. The return to boom and bust, or at least the existence of some form of economic cycle, no matter how hard Brown and others hoped they had banished such things. 

Locally, there is a lot of talk that house prices did not fall all that far and that they are starting to head back up. Not sure that we can support that with the data currently about, but it will be interesting to see how prices are in July/August time as the selling season slows. Maybe then we'll have a better idea, and I'll know just how far into the valley that we have gone here in leafy Cambridge. 

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