One million homes face Interest-only remortgage threat

chucky

JimmyTheWig wrote: »

Given that the house purchase is a long term investment, would it not be fairer to compare it to a stock market linked investment?
E.g. if you bought a house for £30,000 25 years ago and rented it out vs. putting £30,000 into, say, the FTSE all share index 25 years ago what would have acheived better results?

I don't know the answer and am on neither side of the fence. I'm just interested.

it probably depends what type of property you buy, area, purchase price, LTV etc...

just like it would depend on which stocks you may pick or even FTSE index you use.

i'm sure that you could show it either way which is better or worse to invest in.

IveSeenTheLight

DervProf wrote: »

In your experience, and in most cases, yes.

However, it can go wrong. There is an element of risk, surely ?

It of course can go wrong and there is always an element of risk.
Same with putting your money in the bank, there is a risk on what returns you will get.

I simply showed (if done properly) that there does not need to be HPI or rent increases in order for property investment to still fas ouweigh putting the money in a savings account.

Now do the same calculations increasing HPI by 2.9% per annum (as has been showed in the Last 30 years by Nationwide) and also calculate rent increases over that same 25 year period.

Also consider the profit each year that I discounted to your benefit

Factor in a period of voids (although can be largely discounted in my experince if well marketed)

Why do I invest in property, to provide a future I do not believe I have in the security of pensions (which I also have).

At worst case, I'm preparing that if property prices become so unsustainable going forward, that I am providing for my children.
I don't intend to give them things easily, but as any parent would do, they want to provide for them if need be.

IveSeenTheLight

RenovationMan wrote: »

Is it still the case that HPI will outstrip the stockmarket? I cant see the same HPI levels occurring over the next 15 years that we have seen in the last 15 years.

Looking forward is all pure speculation.
It also depends on the timeframe.

The stock market took a battering, a far higher percentage drop than house prices I believe.
Therefore it would seem that it may have more margin to increase from this basepoint.

But you never know what will happen for certain, you can only make a decision for yourself as to how much risk you wish to take to obtain a certain return

RenovationMan

I think that people should just save or invest in whatever they feel comfortable and not worry too much about whether there are better gains to be had elsewhere. You can tie yourself up in knots and end up doing nothing if you over analyse.

JonnyBravo

DervProf wrote: »

In your experience, and in most cases, yes.

However, it can go wrong. There is an element of risk, surely ?

Of course.

There is an element of risk crossing the road.
You know who gets caught out? Usually, the one who crosses without thought of the risk, the one who doesn't look properly.

Doesn't mean you don't cross the road ever though does it?

Graham_Devon

IveSeenTheLight wrote: »

Exocet, please keep 'winging' it if that's what your happy for.
Graham_D can keep on talking about things he admits he doesn't know about.

You can;t really complain when people correct the flaws in the arguments though because you wing it or can't be arsed to understand the information you bring to the forum.

I know what Capital Gains is. I know what the percentage was...just not sure what it is now, as I think it had something to do with how much you earn, i.e high earners.

All I did was simply mistake the fact that you said no HPI, and mistook it for buying at 30k and selling at 150k. My bad, misread what you said, got it wrong, said fair enough.

I understand you are going to go to great lengths to show everyone I made a mistake. But they can all see I did, I said so myself.

DervProf

chucky wrote: »

well you do struggle with the basics... it's understandable...

I didn`t struggle with a basic calculation did I ? You told me I`d got it wrong, then backtracked.

Talking of backtracking............

that's fine... you backtrack all that you want...

If you go back to post #82, where I first raised the issue, it would appear that you need to backtrack again. I stated in my first response to the original point "not in all cases", then stated it again, causing you to accuse me of backtracking.

chucky, you might be able to provide a decent debate on house prices, the economy etc, and I might be able to have a decent debate with you. I have simply pointed out a few obvious errors in some of your posts. Nothing nasty intended, and I`m certainly not avoiding any debate. There is a lot of evidence on the forum to show that it is you that doesn`t understand the basics.

What is understandable, I suppose, is that you don`t like it, and seem to retaliate with some fairly inventive claims about me (such as avoiding some points that you make, by picking you up on your errors). Again, for the last time, please raise the points that I`ve avoided, and I shall answer them.

Meanwhile, IveSeenTheLight made a claim that investment in property always beats putting money in a savings account. I simply pointed out (for balance) that this is not always the case (post #82). I later backed up my claim, to which IveSeenTheLight gave a very good and detailed response. I know where IveSeenTheLight is coming from on the subject, and that`s fair enough. You then accused me of backtracking. I will not accept that in this case, and therefore have responded.

If you pick me up on something, and I have genuinely done wrong (such as backtracking), then you will get an apology, or an explanation. I think I am being reasonable and courteous.

.... and I`ve just noticed that Graham_Devon has just done the same. I think you`ll find things more pleasant around here if you adopt the same attitude.

IveSeenTheLight

Graham_Devon wrote: »

I know what Capital Gains is. I know what the percentage was...just not sure what it is now, as I think it had something to do with how much you earn, i.e high earners.

All I did was simply mistake the fact that you said no HPI, and mistook it for buying at 30k and selling at 150k. My bad, misread what you said, got it wrong, said fair enough.

I understand you are going to go to great lengths to show everyone I made a mistake. But they can all see I did, I said so myself.

Graham I thanksed your post 94 and said fair play in post 95.
I thought you knew waht is was having contributed to 19 threads before on the subject.

I'm confused now, you say above you know how it works but in post 92 you stated

Graham_Devon wrote: »

Well thats a fair point, if that's how it works.

Never mind, we can move on instead of getting in a muddle about it.

JonnyBravo

DervProf wrote: »

If you pick me up on something, and I have genuinely done wrong (such as backtracking), then you will get an apology, or an explanation. I think I am being reasonable and courteous.

That's the problem with the zealots on both sides of this debate.
Backtracking is wrong and to be avoided at all costs?
Why?
Aren't people allowed to change their mind?

God knows I have often enough with what I think house prices are going to do.
Anyone else "done wrong"?

chucky

DervProf wrote: »

Nothing nasty

i know that...

DervProf wrote: »

I have genuinely done wrong (such as backtracking), then you will get an apology, or an explanation. I think I am being reasonable and courteous.

of course - as was i being reasonable and courteous

where i made that comment was on this thread
"Looking on the positive side: Why falling house prices are a good thing"

DervProf wrote: »

.... and I`ve just noticed that Graham_Devon has just done the same. I think you`ll find things more pleasant around here if you adopt the same attitude.

and so did i on the thread that we were discussing 2% and rounding up.

it's a good message that you send about pleasantness and i'm sure that you will be consistent and pick up on it with a number of other people and not just me on here...