Who'd vote for lower house prices? Not many...

IveSeenTheLight

Emy1501 wrote: »

The issue is what percentage of people can or actually access their equity for anything other than to move homes.

I wonder if this will increase.

There are many options to sell property and still live in your home as a way of funding / increasing retirement wealth.

Another option would be to consider taking out a mortgage on a mortgage free property, thus releasing equity. Ok there a cost for releasing the equity i.e. mortgage interest, however the value is you still get to live in your own home.
The added advantage is lowering your estate wealth upon death.

I'm not against people SKIing (Spending Kid Inheritance ing) in retirement

Emy1501

wotsthat wrote: »

If you've got a £1m house and it's paid off you ARE rich. You might not feel it or perceive it if you're on a small fixed income but by most measures you're definitely rich.

A government comes along that is going to guarantee that house prices will be 20% lower. That's a real £200k we're talking about - once it's gone it can be accessed or passed on. I'd have to be really confident that it was going to be better for the country as a whole to vote for that.

I'd be much more likely to vote for a government guaranteeing that house prices would stay the same and wages were going to increase over 5 years so that house prices compared to wages were 20% cheaper.

people are not bothered about what is better for the country but more about their own personal circumstances.

The average house is worth about 170k so someone with house worth 1m isn't normal or average.

So you have to look at from the person with the average house and average number of kids and then consider what is more beneficial.

Ie price falls by 20% 2 kids get 20% off first house. Less deposit and less interest to repay.

like has been previoulsly said will depend on how many people fit into each category

Gracchus_Babeuf

wotsthat wrote: »

If you've got a £1m house and it's paid off you ARE rich. You might not feel it or perceive it if you're on a small fixed income but by most measures you're definitely rich.

You are potentially rich, but you can only tap this wealth by selling the house and moving into something much smaller. So yes, in a way you are correct.

Emy1501

IveSeenTheLight wrote: »

I wonder if this will increase.

There are many options to sell property and still live in your home as a way of funding / increasing retirement wealth.

Another option would be to consider taking out a mortgage on a mortgage free property, thus releasing equity. Ok there a cost for releasing the equity i.e. mortgage interest, however the value is you still get to live in your own home.
The added advantage is lowering your estate wealth upon death.

I'm not against people SKIing (Spending Kid Inheritance ing) in retirement

Nothing against Sking either but it's likely to cause more problems for future generations as I suspect many will be looking at inheritance to fund retirement.

Also releasing equity is expensive

Again it will depend on how you perceive the kids future etc

Mallotum_X

IveSeenTheLight wrote: »

True

False.

I've assessed the market place and consider that long term house prices are likely to be far higher when my children are looking to buy than they are now.

What I have therefore done is take measures to secure my childrens future if this were to happen by investing in property now.

If prices drop, then it's easier for them, if not then I've hedges against price increases for them.

Main point is that it is human nature and natural to want to provide for your family
If you pick your head up and look further ahead, your likely to be able to circumnavigate the obstacles that come in your path.

And this is an option for what % of the population...

Think about it a bit more would your kids be better off with house prices falling or getting a flat/house from you and then not being able to move on due to those pesky high house prices elsewhere.

Regardless of what will happen, the majority of the next generation would be a lot better off if house prices fell. Agreed that the next generation of families with a large property portfolio may not be but what % are we talking about here?

Prices in general dont appear to be falling much, but neither are they going up. Personally I think this status quo has a long way to run, with gradual real falls for a number of years.

In the mean time we stay in recession, sadly a quick sharp shock a couple of years ago would have probably done the nation far more good than all the measures put in place to hold things up a bit.

IveSeenTheLight

Emy1501 wrote: »

people are not bothered about what is better for the country but more about their own personal circumstances.

The average house is worth about 170k so someone with house worth 1m isn't normal or average.

So you have to look at from the person with the average house and average number of kids and then consider what is more beneficial.

Ie price falls by 20% 2 kids get 20% off first house. Less deposit and less interest to repay.

like has been previoulsly said will depend on how many people fit into each category

I can agree with this post, however....

My children are 3 and 1. The likelyhood is that house prices will be far greater when they are in a position to buy than they are now, let alone 20% lower.

I have therefore hedged against price rises by securing property for them now.

I probably would not fit into your "average" person because of this but it is possible to set yourself apart from the "average" and consider the most likely way to succeed going forward.

the_flying_pig

chucknorris wrote: »

You were never in the debate with any logic trying to argue that 50k is just as good as 150k.

i know that you appreciate there are some subtleties beyond this but, goodness me, we're talking about inflation.

imagine that i had £30 in my pocket at the beginning of a Saturday night & was determined to spend it on ten pints of wifebeater, each priced at £3.

if someone offered me another £30 to spend, but at the same time told me that the price of lager had doubled to £6 a pint, meaning that i'd need to spend all of my £60 in order to get a proper skinful, what kind of a short-sighted idiot would i be if in response to this i threw my hands in the air in celebration, shouting, 'woohoo, i've doubled my money :beer: :beer:'???

the people here who the [house price] inflation benefits are the people who have stopped buying. now, i know that's a fair old slice of the population in the case of housing, but it's obviously not everyone or even necessarily most people.

IveSeenTheLight

Mallotum_X wrote: »

And this is an option for what % of the population...

No idea, just an example of opportunities and thinking outside the box a little.
Taking a risk and benefitting from the reward.

Mallotum_X wrote: »

Think about it a bit more would your kids be better off with house prices falling or getting a flat/house from you and then not being able to move on due to those pesky high house prices elsewhere.

Maybe you need to think about it a bit more.
If I've hedged against house price rises for them, surely they would then have the option to sell, have substantial equity to offer on another property.
Should house prices continue to rise (and they are likely long term)and price out more of the population, they'd be in a better position than if I hadn't hedged property for them.

Mallotum_X wrote: »

Regardless of what will happen, the majority of the next generation would be a lot better off if house prices fell. Agreed that the next generation of families with a large property portfolio may not be but what % are we talking about here?

It's debateable whether lower prices would benefit the next generation. It would depend on a lot more things.

Disposable income is the key. Let's suppose house prices are cheaper, but if the population is still restricted because food, water, energy etc etc etc is still hampering the ability to save, the reduction in house prices could be offset by those other outgoings.

Currently the mortgage payments as a percentage of income is lower than the last 30 year or so average.

Affordability isn't the issue here, it's the ability to save for a deposit.

Indeed, what's to say if disposable income increased as a result of lower prices, it would not have a negative impact on wages.

Mallotum_X wrote: »

Prices in general dont appear to be falling much, but neither are they going up. Personally I think this status quo has a long way to run, with gradual real falls for a number of years.

Real, in terms of what? Inflation?
That was my point above, it doesn't matter if the price of energy, food, etc increases more than house prices, you should be comparing house prices to income.

In real terms, houses may be cheaper. That's no guarantee they will be more affordable going forward. Be aware of this.

Mallotum_X wrote: »

In the mean time we stay in recession, sadly a quick sharp shock a couple of years ago would have probably done the nation far more good than all the measures put in place to hold things up a bit.

There is very little an individual can do to affect the Nation.
My advise would be for individuals is to think closely about themselves, their situation and how they can navigate their situation to achieve the best results for them.

This is not nor likely to ever be a Socialist Utopia where the Mation has everything equally.

IveSeenTheLight

the_flying_pig wrote: »

the people here who the [house price] inflation benefits are the people who have stopped buying. now, i know that's a fair old slice of the population in the case of housing, but it's obviously not everyone or even necessarily most people.

Eh no.

If there is house price inflation, you secure the property at that point of time.
The house then continues to inflate and you benefit.

Should you buy a more expensive property then agree's the inflation means that it costs you more, but then again, house price inflation would mean you benefit more.

A wise financial advisor once told me not to sell property unless I had to.
It is paying dividends now as each time I have bought and didn't sell, I ended up with increase property calue, which so far has increased beyond inflation, with the additional beneift of tenants paying the mortgage interests and a substantial profit each month.

Emy1501

IveSeenTheLight wrote: »

I can agree with this post, however....

My children are 3 and 1. The likelyhood is that house prices will be far greater when they are in a position to buy than they are now, let alone 20% lower.

I have therefore hedged against price rises by securing property for them now.

I probably would not fit into your "average" person because of this but it is possible to set yourself apart from the "average" and consider the most likely way to succeed going forward.

Most people can just afford 1 house let alone 3.

My kids will lucky as their grandparents own a number of houses so they probably be ok but their or your kids situation is unlikely to be the norm.

The reality if housing cost continue to outstrip inflation then our growth problems will not go away and we will soon be left behind.