Age of home ownership coming to an end...

Cleaver

phil_b wrote: »

ok... so how about it being dependant on the reason/s for buying a house? Some people buy purely for financial gain by buying cheap, holding, then selling high, or getting gradual income from rent (even then it is a home and an asset, it's a home for someone though not the owner). Most people don't do that and dont care, but many do see the purchase as a means of future financial security.

so yea, a home and/or asset.

Completely agree 100% with everthing you've said there. What I initially took issue with was Hamish saying:

HAMISH_MCTAVISH wrote: »

The price of an asset class can never be good or bad.

As you've pointed out, some people buy a home to live in and don't really care about the value of the property, they just want somewhere to call their own. Thefore, if the price of houses goes up to a point where most of society can't afford one many would perceive this as a 'bad' thing.

If the prices of houses, oranges, water, cars or any other asset goes up massivley in value I would venture that this could also be perceived as 'bad' for society.

HAMISH_MCTAVISH

Graham_Devon wrote: »

In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value .

See "imputed rent".

By living in a house you own, you don't have to pay rent.

A house that you live in is a tangible asset that produces value to you.

Graham_Devon

HAMISH_MCTAVISH wrote: »

See "imputed rent".

By living in a house you own, you don't have to pay rent.

A house that you live in is a tangible asset that produces value to you.

I'll throw the cat amongst the pigeons, just cus I feel like it.

What if your on an interest free mortgage

HAMISH_MCTAVISH

Cleaver wrote: »

If the prices of houses, oranges, water, cars or any other asset goes up massivley in value I would venture that this could also be perceived as 'bad' for society.

It can never be "bad" for society as a whole, as any transaction requires two parties, so even if you claim the spurious assertion that half of the transactional parties lose out on the deal, the other half win.

But this is not true of course, because in a free and open market, no transaction completes without mutual benefit.

I won't buy a house unless it is in my self interest to do so. You won't sell a house unless it is in your self interest to do so. And the price will be acceptable to both of us, otherwise the transaction will not occur.

HAMISH_MCTAVISH

Graham_Devon wrote: »

I'll throw the cat amongst the pigeons, just cus I feel like it.

What if your on an interest free mortgage

Winner..... Free housing, sign me up now.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Winner.....

Thank You, g'night.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Thank You, g'night.

I assume you meant to type "interest only".....

Which makes no difference. Inflation erodes the value of the debt, and the asset creates value for you through the process of paying interest on a paltry amount in the future.

DervProf

ILW wrote: »

I have no vested interest one way or the other (I own a house which is now mortgage free) but I can see that lower prices overall would benefit many. If this were to mean some pain for a short time for a relatively low number of owners (those that have bought in the last 5 years with high LTVs or those that have taken on additional borrowing) this may or may not be a price worth paying.

I have been thinking exactly that for a while, and just like you, have as good as no mortgage. Our way of thinking must cause a bit of confusion to some..... a homeowner who isn`t really concerned about the value of their own home, and can see the benefit to society of lower house prices ? The media are certainly at odds with this viewpoint. I keep hearing "more good news for homeowners..... property prices rose again last month". They keep telling us "HPI = good", but at what point do prices reach a level that can be considered as bad news ?

Listening to some of the bulls, we should be accepting that it`s market forces at work here, and that no price is too high. We should do whatever we can to buy property, and celebrate the the ever rising ladder. Anyone who questions the mechanisms at work in the property market shall be dismissed, or made to look like they don`t understand. Everyone else shall be encouraged to work harder, save more, borrow more and they too can enjoy a slice of the action.

I have noticed, over the years, that a lot of people I spoke to welcomed HPI at first, but more recently, more people are either not bothered, or think that prices need to fall. Those that are pro HPI tend to have benefited from it. I suppose if you`ve put your money on red, and you won, you might suggest that others should do the same. My recent good fortune might make me recommend that everyone should play the national lottery. The property market is a little different to outright gambling though (to say the least), more like the stock market. If you buy a stock, and it rises, you can tell everyone what a good investment it was. If others do buy the same stock, the price rises, further reinforcing the message. It`s in the interest of the share holders to encourage others to buy, but we know what this often leads to.

marklv

Home ownership has always been a peculiarly British obsession. Go to Germany or Belgium and you'll find that many, if not most, people actually rent privately. This is because rents are affordable and there is more security for tenants, unlike in the UK.

ILW

DervProf wrote: »

I have been thinking exactly that for a while, and just like you, have as good as no mortgage. Our way of thinking must cause a bit of confusion to some..... a homeowner who isn`t really concerned about the value of their own home, and can see the benefit to society of lower house prices ? The media are certainly at odds with this viewpoint. I keep hearing "more good news for homeowners..... property prices rose again last month". They keep telling us "HPI = good", but at what point do prices reach a level that can be considered as bad news ?

Listening to some of the bulls, we should be accepting that it`s market forces at work here, and that no price is too high. We should do whatever we can to buy property, and celebrate the the ever rising ladder. Anyone who questions the mechanisms at work in the property market shall be dismissed, or made to look like they don`t understand. Everyone else shall be encouraged to work harder, save more, borrow more and they too can enjoy a slice of the action.

I have noticed, over the years, that a lot of people I spoke to welcomed HPI at first, but more recently, more people are either not bothered, or think that prices need to fall. Those that are pro HPI tend to have benefited from it. I suppose if you`ve put your money on red, and you won, you might suggest that others should do the same. My recent good fortune might make me recommend that everyone should play the national lottery. The property market is a little different to outright gambling though (to say the least), more like the stock market. If you buy a stock, and it rises, you can tell everyone what a good investment it was. If others do buy the same stock, the price rises, further reinforcing the message. It`s in the interest of the share holders to encourage others to buy, but we know what this often leads to.

I get the impression that many who think rampant house price inflation is great, start to change their views when they realise that they may have to die or re-mortgage in their 50s to allow their children to buy their own places.