Why Are High House Prices A Good Thing?

ILW

I know this comes up all the time, but looking through a few threads it seems some think high prices are good and about the same think low prices are good.
I cannot see many advantages to high prices except if you are an estate agent or are planning on dying and want to see your benificiaries get a few quid.
I have no real vested interest in this as I do own a house, but have paid off the mortgage and am planning on staying put.

Euphoria1z

if you bought for a lot less than you sold it for, then you have more money when you sell, so those who have property want their property to increase in value so they get more money than what they put in when it comes to sellling, plus the more your house is worth and the less you owe on it, then you get the best interest rates so it costs you less to own it.

on the other side, those buying a property want to buy it at the cheapest possible price so they dont want prices to increase (whilst they havent bought one that is!!!)

that should answer part of your question

StevieJ

ILW wrote: »

I know this comes up all the time, but looking through a few threads it seems some think high prices are good and about the same think low prices are good.
I cannot see many advantages to high prices except if you are an estate agent or are planning on dying and want to see your benificiaries get a few quid.
I have no real vested interest in this as I do own a house, but have paid off the mortgage and am planning on staying put.

Tell that to the the people who bought properties in August 2007 and when there 2 year fix runs out will have to find a 25% deposit to find a decent rate.

ad44downey

ILW wrote: »

but looking through a few threads it seems some think high prices are good

Most of those you describe are buy-to-let pimps so have a vested interest. You're right it's a bad thing for society, it's just more debt for one's children and grandchildren if they ever want to buy a home

ILW

Euphoria1z wrote: »

if you bought for a lot less than you sold it for, then you have more money when you sell, so those who have property want their property to increase in value so they get more money than what they put in when it comes to sellling,

that should answer part of your question

Thats the bit I dont get. Most of the time if someone is selling it is to get a bigger home. This will cost even more if prices in general are high, so where is the advantage?

MrDT

StevieJ wrote: »

Tell that to the the people who bought properties in August 2007 and when there 2 year fix runs out will have to find a 25% deposit to find a decent rate.

The high prices in 2007 were clearly a "bad thing" for those buyers.

Thankfully falling prices will help others from falling into the same trap.

ILW

StevieJ wrote: »

Tell that to the the people who bought properties in August 2007 and when there 2 year fix runs out will have to find a 25% deposit to find a decent rate.

I agree that is not good, but is it not a result of high prices in the first place? If prices had never been that high there would not be a problem.

(As a minor point I think many coming off a 2 year fix will find the SVR is probably lower.)

PasturesNew

Euphoria1z wrote: »

if you bought for a lot less than you sold it for, then you have more money when you sell, so those who have property want their property to increase in value so they get more money than what they put in when it comes to sellling, plus the more your house is worth and the less you owe on it, then you get the best interest rates so it costs you less to own it.

on the other side, those buying a property want to buy it at the cheapest possible price so they dont want prices to increase (whilst they havent bought one that is!!!)

that should answer part of your question

If I could be 4rsed to dissect this, I'd just show 100x over how all of the above is a load of old tosh.

But it's not worth the effort.

PasturesNew

If all studio flats were £20k, 1-bed flats were £30k, 2-bed flats £40k, 2-bed houses £45k, 3-bed houses £55k, 4-bed houses £65k, then most people would be able to own a home, to feel settled .... to be able to see a way forward to getting a larger house if they wanted/needed ... to be free to spend the rest of their money on doing stuff/having holidays/buying nice things - and above all they could see an end to having to pay back the mortgage.

Without the mortgage to pay back, more people would be less stressed at work, wouldn't have to let the boss break their b4lls each month by piling on more work that the worker felt obliged to do for free because they need to keep the job.

People would have the spare cash to have hobbies and interests and a better quality of life.

Less people would be 'trapped' into benefits because they'd be able to find jobs that covered their overheads. Less relationships would break up because of the high cost of borrowing and high rents.

People would be spending as much/more on goods/services (thus creating employment) because they'd have disposable income to spend on stuff.

People could afford to go on courses to change career/direction; they could afford the time out. They wouldn't feel left behind, left out.

Low house prices are a good thing all round.

Euphoria1z

PasturesNew wrote: »

If I could be 4rsed to dissect this, I'd just show 100x over how all of the above is a load of old tosh.

But it's not worth the effort.

why is it not worth the effort? youve already replied, so maybe could have added a few lines to explain your thinking. after all it is a discussion!

StevieJ

PasturesNew wrote: »

If all studio flats were £20k, 1-bed flats were £30k, 2-bed flats £40k, 2-bed houses £45k, 3-bed houses £55k, 4-bed houses £65k, then most people would be able to own a home, to feel settled.

Everyone would want the 4 bedroom ones so they would go up in price or be rationed Soviet style