Why now so hard to get that 1st rung on the propery ladder compared to years gone by?

PoorDave

Dan29 wrote:

Yep, the "value" is what someone is willing to pay. I've never heard anyone refer to their home as an investment though - surely people buy because they need to live somewhere and don't want to rent?

A little from column A, a little from column B.

If you can take 10% of the houses value, and that means you can live there, you can also benefit from the geared investment this provides.

As we know, it can go down as well as up

Jim_B_3

Dan29 wrote:

Yep, the "value" is what someone is willing to pay. I've never heard anyone refer to their home as an investment though - surely people buy because they need to live somewhere and don't want to rent?

Really? It's very common to consider it an investment. Lots of people think of it as their pension.

jonnydoe

This was discussed on another post (pay your mortgage off early) with interesting comments from both sides. I tried to suggest that the lucky people who could pay their mortgages off early have SMALL mortgages in the first place compared to ridiculously high mortgages nowadays. Shame you guys didn't back me up on that thread..

Some young chap even said I was being over dramatical and interest rates on student loans were low so it wasn't a problem.. (sighs)..

Dan29

Jim_B wrote:

Really? It's very common to consider it an investment. Lots of people think of it as their pension.

People think of their own home as their pension? That is silly as, apart from gambling on prices continuing to rise, they'd obviously have to sell up to get at the money. I've never met anyone who'd consider this a good plan - and I'd have words with them if they did

Jim_B_3

People get silly where property is concerned, hence boom/bust cycles. It's also very common to consider the home an asset.

bobsa1

I think it is harder because of the amount of debt people now have, excl mortgage and also the fact that a lot of the cheaper inner city areas have undergone a renaissance and have become a lot more expensive.

In the area where I live a few years ago you could not give away houses in some areas. Cafe's etc arrive, expensive shops and suddenly these areas are really popular and the prices have trebled! also everyone wants to be a property developer (it's not as easy as it looks) and so a lot of first time props are being snapped up as a hobby/new career for someone else.

wibble68_2

Jim_B wrote:

Really? It's very common to consider it an investment. Lots of people think of it as their pension.

This kind of sums up why prices are high at the moment.

Most people think that when they buy a house it's an investment or some kind of piggy bank that could be raided at a later date.

If a person only has 1 house that is their home then it can't be an investment.

The only option to get hold of the cash would be to downsize or do equity release.

I would say that both options are not as common or fruitful as people think.

Someone's home being a pension?

Beam me up Scotty!!!!

Dan29

wibble68 wrote:

The only option to get hold of the cash would be to downsize or do equity release.

I would say that both options are not as common or fruitful as people think.

I agree with most of what you say but would point out that moving can be very fruitful - I moved from a flat in London to a house in Cardiff which cost £150,000 less. Wouldn't work now of course - I was lucky that I bought in London in 1996.

wibble68_2

Dan29 wrote:

I agree with most of what you say but would point out that moving can be very fruitful - I moved from a flat in London to a house in Cardiff which cost £150,000 less. Wouldn't work now of course - I was lucky that I bought in London in 1996.

Yes I agree some people can make money by moving to a different area or continually doing work to their house and moving on.

The real winners are the government though.

BobProperty

PoorDave wrote:

How do you justify the fact that the market goes up while they do it? How can the "idiots" doing this be causing the market rise that happens while they're doing it?

Because it does. Because that's the market. Because that's what happens. People try and explain it lots of ways (Kondratieff ? wave theory is one) but it happens. You can't change it so you have to live with it, at least in most countries on the planet. That's why I think the most dangerous phrase in investing is "It's different this time".