Showing posts from December, 2015

UK House Price History since 1952...

This is more for my own curiosity... Green line = Nationwide UK house prices, corrected for inflation, since 1952 plotted on a log scale (left axis). The trend line is exponential and therefore appears linear on this scale. Purple line = UK population plotted on a linear scale (right axis). Comments are from wikipedia's article on UK economic history.

Buying a House... (aka taking out a 25 year loan)

Buying a house, or more specifically, taking a 25 year mortgage (which is what most people need to do to buy a house), at the present moment is like taking a bet on interest rates. This is not a bet I feel comfortable making. Take a look at the following graph: It shows UK interest rates since 1694. There's something distinctly odd about the graph on the right, where we are now... Taking a 25 year loan, which in the UK is generally only fixed for 2 years at a time (you could fix for up to 10 years, but the penalties for needing to repay early or remortage can be hefty) is equivalent to betting that the following will happen: