House Prices
- Thread starter joe-90
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It isn't real money. It's asset price inflation.
You have a house. It used to be worth enough, if you sold it, to buy another house.
It's still worth enough, if you sell it, to buy another house (less costs).
If you have one house, and need one house, you're no better off.
To the extent that there is any "new" money, it comes from those unfortunates who haven't already got a house, and need to buy one, or trade up to a bigger one.
There is also a modest amount of "new" money coming into the market by people buying buy-to-let houses and bidding up the prices as there is a limited number of houses available, which is smaller than the number of people willing to buy one. Some of these have been frightened by irrational asset price inflation in the past and fear that if they don't buy today, prices will be higher tomorrow.
Since we know that houses cannot increase forever, or reach infinite levels, we know that sooner or later, prices will stop going up. However we do not know when this will happen.
You have a house. It used to be worth enough, if you sold it, to buy another house.
It's still worth enough, if you sell it, to buy another house (less costs).
If you have one house, and need one house, you're no better off.
To the extent that there is any "new" money, it comes from those unfortunates who haven't already got a house, and need to buy one, or trade up to a bigger one.
There is also a modest amount of "new" money coming into the market by people buying buy-to-let houses and bidding up the prices as there is a limited number of houses available, which is smaller than the number of people willing to buy one. Some of these have been frightened by irrational asset price inflation in the past and fear that if they don't buy today, prices will be higher tomorrow.
Since we know that houses cannot increase forever, or reach infinite levels, we know that sooner or later, prices will stop going up. However we do not know when this will happen.
joe-90 said:
Yeah, on an increased mortgage
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crafty1289 said:hopefully sooner rather than later . . . i gotta move out of this house my parents are driving me nuts.
Funny that, they were just saying the same thing.
You`re having aJohnD said:
this country`s economy is built on Greed and The rising price of houses 1968-house£ 4500----------2002 same house£ 120000...over the next 30 years....all I`m likely to see over all `twill be the same despite a crash or 2joe-90 said:
Apart from those with lots of cash in the bank or under the bed.
Wish I had either of those Hermes! I really feel for people trying to get on the property ladder nowadays. It was bad enough for us when we bought our first house 20 years ago but what chance have an average young couple got in this day and age?
I suppose it's OK if you are one of the govt's core workers and live in an area where you are needed Most people aren't though ...
I suppose it's OK if you are one of the govt's core workers and live in an area where you are needed
Most people aren't though ...
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hermes said:joe-90 said:
Apart from those with lots of cash in the bank or under the bed.
Neither will help you. Currency will become worthless and banks don't actually HOLD your money. It's all placed in that mysterious bag called "The national debt".
joe
I know people who have ben thinking for the last few years that the crash was coming any day, have held back from buying because of it, and find themselves in a worse place now than ever.
Here's another scenario though. Lets say my house is worth about £300k, and I have a £130k mortgage on it, costing £750 a month. Say I sold up now, I could probably rent somewhere very nice for £900 a month, so could in effect have 15 months rent free living with the equity and the equivalent of an extra £15k salary to boot.
Now obviously I have to keep paying rent forever, rather than be all paid up in 22 years or so BUT if the crash happens, I can then buy a similar house to what I live in now for, lets say £200k or less depending on how big the crash is, giving me £100k in pocket. I think you would need the proverbial balls of steel to embark on this plan, but does anyone see any pitfalls if a crash os such a certainty ?
Here's another scenario though. Lets say my house is worth about £300k, and I have a £130k mortgage on it, costing £750 a month. Say I sold up now, I could probably rent somewhere very nice for £900 a month, so could in effect have 15 months rent free living with the equity and the equivalent of an extra £15k salary to boot.
Now obviously I have to keep paying rent forever, rather than be all paid up in 22 years or so BUT if the crash happens, I can then buy a similar house to what I live in now for, lets say £200k or less depending on how big the crash is, giving me £100k in pocket. I think you would need the proverbial balls of steel to embark on this plan, but does anyone see any pitfalls if a crash os such a certainty ?
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