What is UK property really worth? Here are three ways to find out

JonnyBravo

abaxas wrote: »

He does have a very good point. Our house price 'bubble' is relative to the £. When if you look via other currencies it's crashed more than a crashy thing driven by a top gear hamster.

So to one person they have doubled their money, but to another its halved.

I'm aware that the decline in house prices relative to other currencies (or indeed some types of "stuff" such as "bussels of weat") is greater than relative to the pound.
I'm saying it is largely irrelevant for the majority of the population as they have no large stockpiles of "stuff" or indeed large amounts of foreign currency.

JonnyBravo

chucknorris wrote: »

I agree with you! But I never said that it was unique to property!

Although I must admit that I wouldn't know how to buy shares with a low interest loan, get someone else to pay rent covering the interest (in part or fully) and be able to offset the interest against tax, which is what I like about property investment. But I do appreciate that it isn't for everyone, each to his own.

Right now I am just being risk averse and only investing in pension, savings accounts (reluctantly due to a lack of opportunities elsewhere) and NSI certificates (when they reintroduce them) plus minor amounts in shares for diversity and portfolio balance (ftse trackers only, I know this bit isn't risk averse).

Yep and I'd say it is also generally true to say that the amount of money you can leverage with property is far larger than for shares etc for "the average man".

As thrugelmire has pointed out, this isn't necessarily a good thing as it works both ways, but as you've pointed out you can mitigate much of the risk depending on circumstance.

abaxas

JonnyBravo wrote: »

I'm aware that the decline in house prices relative to other currencies (or indeed some types of "stuff" such as "bussels of weat") is greater than relative to the pound.
I'm saying it is largely irrelevant for the majority of the population as they have no large stockpiles of "stuff" or indeed large amounts of foreign currency.

But it's that 'other stuff' that is priced in other currencies.

Your house may have doubled in price, but your food/energy has tripled.

That is the point, money is just a number. It can go up, but still lose out.

JonnyBravo

abaxas wrote: »

But it's that 'other stuff' that is priced in other currencies.

Your house may have doubled in price, but your food/energy has tripled.

That is the point, money is just a number. It can go up, but still lose out.

I agree with this but what is the point you're trying to make?
smeagold/argent47 etc was saying we shouldn't use fiat currency to measure anything.
I was saying that's all very well but not very practical.
You're now saying some stuff can go up in a fiat currency more than other stuff due to exchange rates. So? Some "stuff" (such as food/energy) can go up more than house prices for a whole host of reasons.
What are you trying to say?

RenovationMan

JonnyBravo wrote: »

I agree with this but what is the point you're trying to make?
smeagold/argent47 etc was saying we shouldn't use fiat currency to measure anything.
I was saying that's all very well but not very practical.
You're now saying some stuff can go up in a fiat currency more than other stuff due to exchange rates. So? Some "stuff" (such as food/energy) can go up more than house prices for a whole host of reasons.
What are you trying to say?

We should all have STR'd in 2006/2007 and bought oil barrels and put them togethr to make some sort of shelter to live in while their value increases and house values decresed. Once we have had enough of living like third world people in our 'shanty home' we could then have sold the barrels of oil and bought a house.

I means JB, how much more straightforward could it be?

abaxas

JonnyBravo wrote: »

I agree with this but what is the point you're trying to make?
smeagold/argent47 etc was saying we shouldn't use fiat currency to measure anything.
I was saying that's all very well but not very practical.
You're now saying some stuff can go up in a fiat currency more than other stuff due to exchange rates. So? Some "stuff" (such as food/energy) can go up more than house prices for a whole host of reasons.
What are you trying to say?

What I'm trying to say is there is that making money means nothing if the value of that money is declining faster than you are making it.

Eg your amount of money can double, but in reality it's value has halved.

People tend not to understand this.

RenovationMan

abaxas wrote: »

What I'm trying to say is there is that making money means nothing if the value of that money is declining faster than you are making it.

Eg your amount of money can double, but in reality it's value has halved.

People tend not to understand this.

I understand this in respect to imported products, but I don't see how it works with property, which is not imported?

abaxas

RenovationMan wrote: »

I understand this in respect to imported products, but I don't see how it works with property, which is not imported?

You are english and you look at property 2004-2012 in the North. The price in £ is the same now as it was in 2004.

You are Japanese and look at the same property. In terms if yen, it has halved in 'value'.

To one person, they have not lost anything. To another the market has crashed more than a crashy thing living in crashville.

That is my point. You can make money, but that doesnt mean the money has any value.

LydiaJ

RenovationMan wrote: »

Depends what you're investing in and the strategy you are applying. If you are getting into a BTL to use the rent to fund a retirement that will take place in 20 years or more, then it's largely irrelevent over that time scale when you get in and you don't get out until you die.

But do you want the hassle of being a LL when you are over 80 and have dementia or Parkinson's or whatever?

RenovationMan

LydiaJ wrote: »

But do you want the hassle of being a LL when you are over 80 and have dementia or Parkinson's or whatever?

You can just opt for a fully managed property via an rental agency. They sort out everything but charge a higher price. I used this option when I was working overseas, it worked well and I had no hassles.