Originally Posted by
fungus pudding
A lot of our 'luck' can be put down to high interest rates. House prices and interest rates are opposite ends of a see-saw. House prices may have been only 4 times an annual income, but interest of 10 to over 20% at times meant occupancy costs were similar to today in real terms, and it's that 'affordasbility level' that dictates house prices.
A 100,000 loan at 10% costs 10,000 while 10,000 buys a 200,000 loan at 5%. Same outgoings, but I know which one I'd rather have.