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

Emy1501

chucknorris wrote: »

So you think that if you live in a 500k house it is no better to own it outright to having a 500k mortgage on it. :rotfl:

Its about the meaning of the money. Whether the house is worth 500k or 100k will have little meaning to most as they will never be able to access the money as most do not downsize release equity etc.

chucknorris

Emy1501 wrote: »

Its about the meaning of the money. Whether the house is worth 500k or 100k will have little meaning to most as they will never be able to access the money as most do not downsize release equity etc.

It is not about the value of the house, it is about net worth, in my example the person with the 500k mortgage has to pay the interest every month!

Just because 'most' people do not downsize does not mean that everyone cannot access the money. Although I sort of agree with you about downsizing, actually we are going to upsize when we retire. This upsizing will actually create another 500k of equity that we can tap into if we ever wanted (or needed) to by downsizing back down to the same as where we are now, which although I do not think will be needed it will be there if needed.

Emy1501

chucknorris wrote: »

It is not about the value of the house, it is about net worth, in my example the person with the 500k mortgage has to pay the interest every month!

Just because 'most' people do not downsize does not mean that everyone cannot access the money. Although I do agree with you about downsizing, actually we are going to upsize when we retire.

I'm not disputing that where prices are rising then it makes sense to buy and own out right. My point is more about whether the vast majority can actually acess the money they have in their house.

Whether my house is worth 300k or 200k makes no real difference to me apart for rates as I can't really downsize and when I look at my parents and their friend hardly any have down this so I therefore suspect it will be the same for me and my wife.

chucknorris

Emy1501 wrote: »

Whether my house is worth 300k or 200k makes no real difference to me

Of course it does not, but we are talking about your net worth, i.e. your equity, not the property value. You seem to be confusing 'net worth' and property values.

Graham_Devon

Emy1501 wrote: »

I'm not disputing that where prices are rising then it makes sense to buy and own out right. My point is more about whether the vast majority can actually acess the money they have in their house.

Whether my house is worth 300k or 200k makes no real difference to me apart for rates as I can't really downsize and when I look at my parents and their friend hardly any have down this so I therefore suspect it will be the same for me and my wife.

The problem here, is you are coming from the family home angle. Others are coming from an investor angle (most of those arguing with you are BTL investors...or say they are).

Its the crux of nearly every argument on here. BTL landlords up against homeowners / aspiring home owners.

Everything is seen differently. Even definitions.

wotsthat

Emy1501 wrote: »

Its about the meaning of the money. Whether the house is worth 500k or 100k will have little meaning to most as they will never be able to access the money as most do not downsize release equity etc.

You might be living on another planet. Every homeowner will be able to understand the what the difference is between a £500k house and a £100k house. It really isn't that abstract or complicated.

According to Lloyds it's downsizers driving the current market. Apparently they are selling up, buying a new place and looking forward to spending the average £100k that's released.

Emy1501

chucknorris wrote: »

Of course it does not, but we are talking about your net worth, i.e. your equity, not the property value. You seem to be confusing 'net worth' and property values.

Whether my equity is 150k or 50K has no real meaning to me as the chances are I will never have any real access to it. I suspect its the same for most of those who own a house.

Its of course different for people like my parents who own a number of houses.

Emy1501

wotsthat wrote: »

You might be living on another planet. Every homeowner will be able to understand the what the difference is between a £500k house and a £100k house. It really isn't that abstract or complicated.

According to Lloyds it's downsizers driving the current market. Apparently they are selling up, buying a new place and looking forward to spending the average £100k that's released.

What percentage of people of retirement age do you know who have downsized and released 100k? I would say its about 5% of the those I have come across. The vast majority still live in the home they had when I was a child and will never release the cash.

It one thing planning to downsize and actually doing it. I looked at number of houses of people trying to down size and pretty much all never did because they realised the figures did not stack up at the price the house was actually worth rather than what they wanted for it.

chucknorris

Emy1501 wrote: »

Whether my equity is 150k or 50K has no real meaning to me

If your equity is 50k (rather than 150k) then you are paying mortgage interest on another 100k! That has real meaning to you!

Emy1501

chucknorris wrote: »

If your equity is 50k (rather than 150k) then you are paying mortgage interest on another 100k! That has real meaning to you!

Not if the price of my house fell by 100k which seems to be what the thread is about