Climbing the Housing Ladder to retirement?

Graham_Devon

It all sounds quite costly to me. Can see the point of a bigger home if you seriously need, or indeed want it. But he's having to service the costs of the bigger home which have all been mentioned.

He could also lose it at any time due to the !!!! life can sometimes throw at us. For instance (dunno if he is married), but what if they split and half the house goes to her. Thats a lot of servicing of a pension fund to give half of it away.

It's a gamble. Some people do well. I think I would personally stick to other routes. Sounds quite risky, but then with risk, often comes reward!

Don't think it's something any serious advisor would reccomend though. It's the equivalent of investing all of your life in high risk shares, not the normal pension shares.

I think the problem today, with looking forward and suggesting HPI multiples, is that in doing this, and looking at the past multiples, you are ignoring the fact that we are already on high multiples compared to history. I saw a post saying the house today at 300,000 could be 3,000,000 in 30 years time. Thats all well and good, but wage inflation would have to be absolutely massive to support those prices, with the average person earning what, £600-900k per year? Or put another way, £432 per hour? Thats what, a 450% increase over 30 years....or 15% wage increase per year.

Harry_Powell

Graham_Devon wrote: »

It all sounds quite costly to me. Can see the point of a bigger home if you seriously need, or indeed want it. But he's having to service the costs of the bigger home which have all been mentioned.

He could also lose it at any time due to the !!!! life can sometimes throw at us. For instance (dunno if he is married), but what if they split and half the house goes to her. Thats a lot of servicing of a pension fund to give half of it away.

I also expressed my concerns about being able to pay the mortgage and he said he was covered with redundancy protection insurance for 12 months (with the usual 3 month gap before this starts), so would have 15 months or more to sell the house if he couldn't get a job in all that time. I assume that other types of insurances could cover for the !!!!!! life throws.

As far as losing half due to divorce, this would be the case regardless of where the capital was held, unless it's in a secret off-shore account I suppose. Pensions are no longer safe from the grasping hands of a divorce lawyer. However, they are safe from the grasping hands of a bankruptcy lawyer, so one up for pensions above houses and ISAs!!!

As far as the size of the house (and extra costs therein), I think it's already been mentioned in the thread that often there isn't a huge difference in costs between a 4 bed home or a 6 bed home and that it doesn't always follow that more expensive = larger, it's all about location, location, location. I know I could easily pay twice as much for a studio in Mayfair than I have for my house in Hayes, yet have half the living space and half the heating/lighting costs.

nearlynew

I have been planning my retirement for about the last 10 years (I'm 46)

Two things I have NEVER included in my calculations are the value of my home and a state pension.

Harry_Powell

nearlynew wrote: »

I have been planning my retirement for about the last 10 years (I'm 46)

Two things I have NEVER included in my calculations are the value of my home and a state pension.

What sort of home do you have?

(also I'd be interested in your pension planning, at the risk of going off-topic, what's your strategy?)

nearlynew

Harry_Powell wrote: »

What sort of home do you have?

(also I'd be interested in your pension planning, at the risk of going off-topic, what's your strategy?)

You're a nosey !!!!!! aren't you?

I live in an old 3 bed semi-detached cottage with a big garden.
I also own a 3 bed terrace which I rent out.
(both are mortgage free)

I also have final salary pension, private pension, S&S isas and some cash.

HAMISH_MCTAVISH

Graham_Devon wrote: »

I saw a post saying the house today at 300,000 could be 3,000,000 in 30 years time. .

I doubt that is likely.

I currently own 2 houses, one is mortgage free and worth somewhere around 400K, and the other somewhere around 200K. The 200K house has a mortgage, that thanks to overpayments for the last 3 years will be clear in around 15 years or so.

My (conservative) expectation is that in real terms, those assets will be worth roughly one million pounds in todays money by the time I will be starting to look at cashing in, 15 years or so from now. Or a 40% growth in 15 years. Which would suit me just fine.

I think there is a real possibility, perhaps even a probability, of growth far beyond that, as much as 100% in real terms in the next 20 years, and I'd be delighted to see it.

I think there is zero prospect of long term stagnation in real terms.

Harry_Powell

We'll all be millionaires in 15 years time, Rodney.

Harry_Powell

nearlynew wrote: »

You're a nosey !!!!!! aren't you?

I live in an old 3 bed semi-detached cottage with a big garden.
I also own a 3 bed terrace which I rent out.
(both are mortgage free)

I also have final salary pension, private pension, S&S isas and some cash.

Sorry . Was just wondering if you had a large family home that you'd be looking to downsize from, so it would factor into your retirement plans, even if you hadn't accounted for it in real terms.

I'm in the process of sorting out my retirement options and looking for advice (hence the discussion in the pub last night). I have a sipp at the mo and looking at ISAs but dont have a huge amount of cash to play with at present.

Graham_Devon

HAMISH_MCTAVISH wrote: »

I doubt that is likely.

I currently own 2 houses, one is mortgage free and worth somewhere around 400K, and the other somewhere around 200K. The 200K house has a mortgage, that thanks to overpayments for the last 3 years will be clear in around 15 years or so.
.

15 years? Your always saying between you and your partner you are bringing in 100k + a year.

15 years to clear 200k!? Why does nother ever add up.

Harry_Powell

Graham_Devon wrote: »

15 years? Your always saying between you and your partner you are bringing in 100k + a year.

15 years to clear 200k!? Why does nother ever add up.

He also has £100k in cash savings and £100k in shares. Do try to keep up Graham!