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Debate House Prices
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Savings Accounts Obsolete-- Now "Losing Accounts"
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Inflation may be eating away at most peoples savings but some of us are saving for homes. Thus it does not matter as much as houses are deflating which makes up for the lack of interest.
:exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.
Save our Savers
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Saving for a deposit ? Well, those savings of yours are losing value against CPI, and according to the property bulls, you`re losing even more value against that first home you are saving for. Still, it just means you`ll end up with a slightly larger mortgage than you anticipated. Not to worry though, you`ll have plenty of time to pay it off, because you won`t be retiring until about 70ish.
Chances are those of us below 40 will be working till we're 70 anyways.
One has to weigh up the differential between the loss on your deposit against the decrease in house prices. If the average house price is £160k, a fall of 5% (for example) will save you £8k where as on a deposit of (say £40k) one loses approximately 3.5% i.e. £1,400.
Bulls might prefer to save £1,400 but I prefer to save £8,000
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Inflation may be eating away at most peoples savings but some of us are saving for homes. Thus it does not matter as much as houses are deflating which makes up for the lack of interest.
According to Acadametrics, which you quote frequently, prices are up by 2% this year so far. Wage inflation is only 0.6% in the same time.
And real savings returns are now negative for most people.
Try again.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
are house prices guaranteed to fall or are these assumptions?Chances are those of us below 40 will be working till we're 70 anyways.
One has to weigh up the differential between the loss on your deposit against the decrease in house prices. If the average house price is £160k, a fall of 5% (for example) will save you £8k where as on a deposit of (say £40k) one loses approximately 3.5% i.e. £1,400.
Bulls might prefer to save £1,400 but I prefer to save £8,000
another assumption for you, what happens if prices go up?0 -
Bulls might prefer to save £1,400 but I prefer to save £8,000
And if you'd bought early last year, you'd have saved £20,000.
Still, chin up, never say die, etc etc etc.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »
Try again.....
May I?
You'd have a point, for anyone who started to save at the start of the year for a house.
For anyone who started saving before this...fail.0 -
top post brit. house prics are going down bye at least one % every month. thats moneysaving at its bestInflation may be eating away at most peoples savings but some of us are saving for homes. Thus it does not matter as much as houses are deflating which makes up for the lack of interest.0 -
Dirk_Rambo wrote: »top post brit. house prics are going down bye at least one % every month. thats moneysaving at its best
Don't forget leveraging.
If you do not buy a £100K house with a 10% deposit today but save that deposit for one year, the house will then cost £90K next year which means your £10K is worth £20K in real terms.
GGThere are 10 types of people in this world. Those who understand binary and those that don't.0 -
presumably, after buying the house at 90k with the 10k deposit, next year when the house is only worth 80k, you have lost your depositGorgeous_George wrote: »Don't forget leveraging.
If you do not buy a £100K house with a 10% deposit today but save that deposit for one year, the house will then cost £90K next year which means your £10K is worth £20K in real terms.
GG0
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