Debate House Prices


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Is house price inflation advantageous or a massive con?

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  • chucknorris
    chucknorris Posts: 10,786 Forumite
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    edited 1 October 2017 at 12:05PM
    Graham_Devon wrote: »
    Which is exactly what is said on a dodgy AIM penny share forum every time there is a fall in the share price.

    Everyone suggests they are buying more to bring their average down, hoping for heard mentality. Yet the figures on buys, wich are public information, simply don't back up what the heard are saying.

    If people simply "bought more" when there was a reduction in house prices, we'd never have seen the crashes we've seen.

    I'm not saying the herd buy, I'm saying that I would buy. We actually did buy another house in 2008 when prices fell. We bought it for £243k (and spent about £15k doing it up), and it is currently worth around £500k. I also bought 3 properties in 1991, and another one in 1992 in that house price crash too.

    EDIT: But as I said, because of my age I wouldn't buy now, I'm 60 in January, and property is a long term investment, in fact, we sold two properties earlier this year.
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • GreatApe
    GreatApe Posts: 4,452 Forumite
    In the last crash lows of 2008-2009-2010 landlords added a NET 800,000 to their holdings.

    What have the crash cheerleaders to say to that?

    Like I said earlier if house prices doubled tomorrow I would sell all mine if they halved I wouldn't sell any.
  • economic
    economic Posts: 3,002 Forumite
    the other part of the investment equation people tend to forget is currency. sterling has fallen about 40% since 2007. those who bought at the bottom in 2009/10 in london property would not have done as well as someone who bought a US stock fund which is up a lot more especially in USD terms.

    In fact my first property i bought in 2013, i bought off someone who was selling up to go back to australia. she bought in 2006. the gains she made in the property was more then lost in the gbp deval agaisnt AUD. so overall she lost out a bit. she would have been better off renting probably.

    still buying london property in 2009/10 beats sitting on a pile of cash! and obviously for the above i am talking about investing in a btl and not a home. i think pretty much anytime is a good time to buy a home as long as you plan to stay there long term.
  • chucknorris
    chucknorris Posts: 10,786 Forumite
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    economic wrote: »
    still buying london property in 2009/10 beats sitting on a pile of cash! and obviously for the above i am talking about investing in a btl and not a home. i think pretty much anytime is a good time to buy a home as long as you plan to stay there long term.

    I re-let a property yesterday, earlier I had planned to sell when my tenants gave me notice, but I changed my mind. I'll keep that particular property for another 4-6 years as it is my highest yielding property.
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • fewgroats
    fewgroats Posts: 774 Forumite
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    Is the property too high or is the land too high?
    Advent Challenge: Money made: £0. Days to Christmas: 59.
  • chucknorris
    chucknorris Posts: 10,786 Forumite
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    fewgroats wrote: »
    Is the property too high or is the land too high?

    They are the same, land price is derived from a residual calculation. There are more factors, but a simplified version to determine the max bid for land would be:

    Gross development value less the construction cost, professional fees, finance costs, profit, etc. = max. price to bid for the land
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • economic
    economic Posts: 3,002 Forumite
    chucknorris wrote: »
    I re-let a property yesterday, earlier I had planned to sell when my tenants gave me notice, but I changed my mind. I'll keep that particular property for another 4-6 years as it is my highest yielding property.

    sounds like a good plan.

    my parents are both 62 and retired now and have a fraction of the wealth you do. i am telling them to enjoy themselves as they dont need to worry about money (with full state pension, annuities and the cash they have as well as the inheritance they will receive from their parents). but they have always been savers and not very financial literate.

    now is probably a good time to think about inheritance as i find it difficult to see how they can spend all their wealth and inherited wealth in their lifetimes (although they seem to not take it seriously), and will certainly go over the 1m threshold for inheritance tax. worse if labour come into power (which is not at all unlikely) then this threshold could potentially be reduced.

    basically its best to just not worry about money and spend it to enjoy yourself.
  • Crashy_Time
    Crashy_Time Posts: 13,386 Forumite
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    GreatApe wrote: »
    In the last crash lows of 2008-2009-2010 landlords added a NET 800,000 to their holdings.

    What have the crash cheerleaders to say to that?

    Like I said earlier if house prices doubled tomorrow I would sell all mine if they halved I wouldn't sell any.


    The 2008 situation has no bearing on todays situation.
  • chucknorris
    chucknorris Posts: 10,786 Forumite
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    edited 1 October 2017 at 12:52PM
    economic wrote: »

    basically its best to just not worry about money and spend it to enjoy yourself.

    That's good advice, I've already started:

    I now only work one day a week (which I consider better than full retirement).

    I'm going to go first class on the train to Newcastle every time that I see my parents. I take my dog with me and it is always hassle because standard class is usually quite full, and it ends up with my dog getting in people's way. But there are certain seats in first class that have space next to the seat, where he can relax and lie down.

    We are going to holiday in Spain for 4 weeks every Dec and 3 weeks in April, starting next April (unfortunately we couldn't get a dog cabin on the car ferry to Santander this Dec, and I won't put him in the ship's dog kennel, he would hate it). This is in addition to any Summer holidays.

    We are going to upsize our home (hoping to view one this week).
    Chuck Norris can kill two stones with one birdThe only time Chuck Norris was wrong was when he thought he had made a mistakeChuck Norris puts the "laughter" in "manslaughter".I've started running again, after several injuries had forced me to stop
  • GreatApe
    GreatApe Posts: 4,452 Forumite
    Crashy_Time wrote: »
    Landlords are mainly selling up because of taxes and voids, if you are heavily mortgaged voids are the landlord killer.

    Yes voids would make landlords sell up if they were excessive.
    However in the south east the areas I know voids are small.
    My voids are about 1% that is to say on average a property is only empty for 3-4 days of the year.
    Or more accurately a tenant rents for about 5 years and then its empty for 2-3 weeks.

    The additional taxes have put off some BTL purchases but also put off some BTL sales.
    However it's nearly 1.5 years since the additional taxes were put in place. Yet during the last 1.5 years house prices haven't crashed in fact in a lot of the country house prices are higher than they were two years ago.
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