House Price Increases-what for?

ThyKingdomCome

hi to all of you who wish for HPI, or delight in it. what is your reason for your beliefs?

What do you do, or intend to do with the increase in value of your home?

borrow against it?
cash in to move to another property or jump off the ladder with a nice wad?
or a recent buyer (like me) wanting more competitive interest rates?

Does the valuation amount provide you security?

just interested really.

Pete111

So I can sell the flat I used to live in and now rent out.

In an ideal world (for me anyway) it will allow me to pay off the mortgage on my house.

Selfish probably but Meh.

Really2

I would say in most cases people have purchased and do not want a house worth less than they purchased it for.

In real terms that means it has to inflate by the same as inflation each year (obviously in the last 10 years it as more than done that).

the only person who can profit from HPI are people who invest. So either BTL, STR or down sizers. No one else really profits from gains.

smartn

Really2 wrote: »

I would say in most cases people have purchased and do not want a house worth less than they purchased it for.

In real terms that means it has to inflate by the same as inflation each year (obviously in the last 10 years it as more than done that).

the only person who can profit from HPI are people who invest. So either BTL, STR or down sizers. No one else really profits from gains.

Dont forget Estate Agents, the government through stamp duty etc, etc... However I do agree with the sentiment that most people dont really benefit from HPI especially if you have kids who will one day want to buy themselves.

Really2

smartn wrote: »

Dont forget Estate Agents, the government through stamp duty etc, etc... However I do agree with the sentiment that most people dont really benefit from HPI especially if you have kids who will one day want to buy themselves.

That is the same as all assets though you still have brokers, Capital gains etc on any other assets you sell.
I just see that as all part of inflation and even though EA's are hated i think of them as any other brokerage.

Your last point is correct, in the end of the day you are buying a family heirloom which can be lived in.
After your gone it is up to your family what happens to it.

I think people forget about interest payments you can usually pay back 2-3X the original value of the house in interest and capital repayments.

If there was no HPI it would never be worth owning, not that I advocating this but I suppose house prices need to double or triple every 25 years for those 25 years of paying to be worth it.
Obviously the benefit comes after those 25 years have passed.

mr_fishbulb

smartn wrote: »

Dont forget Estate Agents, the government through stamp duty etc, etc... However I do agree with the sentiment that most people dont really benefit from HPI especially if you have kids who will one day want to buy themselves.

Or if you want to have kids and need a bigger house.

LydiaJ

Really2 wrote: »

If there was no HPI it would never be worth owning, not that I advocating this but I suppose house prices need to double or triple every 25 years for those 25 years of paying to be worth it.
Obviously the benefit comes after those 25 years have passed.

Why wouldn't it be worth owning if there wasn't HPI? Once you have finished paying it off, you can live in it for nothing. With rent, you have to go on paying for as long as you live there.

bo_drinker

And when H P I gets out of control the bottom rungs are pulled away from f t b'ers and the bubble bursts as is the case. Wages would never keep up the b t l gang went crazy all the tv progs telling everyone to buy buy buy etc. And we are where we are.
Many E a's are out of business the market is on its ar5e and there is no light at the end of the rainbow

dgl1001

ThyKingdomCome wrote: »

hi to all of you who wish for HPI, or delight in it. what is your reason for your beliefs?

What do you do, or intend to do with the increase in value of your home?

borrow against it?
cash in to move to another property or jump off the ladder with a nice wad?
or a recent buyer (like me) wanting more competitive interest rates?

Does the valuation amount provide you security?

just interested really.

We purchased a number of properties (4) about 9 years ago. The plan is to sell them in say 10 to 15 years time to pay off the remaining part of the mortgage and/ or provide for our children. Its a long term strategy and before you ask, they are not in negitive equity. Is HPI a good thing? yes and no

Really2

LydiaJ wrote: »

Why wouldn't it be worth owning if there wasn't HPI? Once you have finished paying it off, you can live in it for nothing. With rent, you have to go on paying for as long as you live there.

indeed that is why I said that owning a house does not come in to value until after you have repaid it (well 25 years I said).

But on average you would expect to pay more in mortgage payments than rent for the above reason.

i would base it on what is the most cost effective. Final value and TCO come in to that calculation.

I would say if you were only planing to live some where for 2 years there would be no case for buying unless there was HPI. (not advocating it but just saying how i would look at it on a cost basis.)

wolvoman

I do not want massive HPI.

Why do people seem to think prices either fall massively or boom massively.

For several years after 1991 they did neither and it allowed the economy to grow.