I go along with you, temi. The psychological effects are only one aspect. While most people are in the housing market for the long term, their view of their 'investment' depends on their circumstances and intentions. If someone was able to release equity of £250k by selling up, think what that would buy in today's terms. Contrast this with £125k in 5 years' time, should the market suffer a 50% drop (entirely possible in some people's opinion). The fact that they need to live somewhere must of course be factored into the equation, but there are more options than simply buying back into the same market.
The silver lining IMO is that the bubble has finally burst and property values can once again return to more realistic levels. Let's face it, no one should ever have needed, wanted or been able to borrow 5 or 6 times their income. |