When did house-prices become a crucial indicator of economic well-being?

Cornucopia

When did house-prices become a crucial indicator of economic well-being?

Not sure about "crucial", but for those who own them, houses are the most expensive/most valuable asset they will ever own.

However, the "dinner party discussion" is largely irrelevant, since most people will never benefit directly from house-price rises.

ruggedtoast

Presumably because notional house prices and imputed rents are used to calculate GDP?

Its all a crock. High housing costs and the cancer of buy to let parasites are a national tragedy, not something to celebrate. Unless you own property and make a lot of money out of being / lending money to buy to let parasites; which a lot of the people who run the country do.

With odd exceptions like fox hunting the things the people that run the country like tend to to be given a default status of 'good' and the things working class people like, boxing, jellied eels, bingo, are looked down on, patronised and denigrated.

Cornucopia

ruggedtoast wrote: »

... the cancer of buy to let parasites are a national tragedy...

Are you saying that ordinary people should not be allowed to invest as they see fit, and that it should be reserved solely for the very rich?

IveSeenTheLight

ruggedtoast wrote: »

Presumably because notional house prices and imputed rents are used to calculate GDP?

Its all a crock. High housing costs and the cancer of buy to let parasites are a national tragedy, not something to celebrate. Unless you own property and make a lot of money out of being / lending money to buy to let parasites; which a lot of the people who run the country do.

With odd exceptions like fox hunting the things the people that run the country like tend to to be given a default status of 'good' and the things working class people like, boxing, jellied eels, bingo, are looked down on, patronised and denigrated.

Good cast. I'll have a little nibble.

Surely under the RTB scheme, many "working class" people have been afforded the luxury of being homeowners.

lisyloo

My personal experience is that not having a mortgage is life changing in terms of freedom, security and choices.
I think it's one of the biggest things most ordinary people can do to improve their life.
I don't mean so they can boast at dinner parties but have some freedom and security.

My OH is out of work at the moment and our whole lives are different from what they would be if we have big mortgage debt or rent hanging over us.

It will also give us choice when we retire. I don't me "my house is my pension innit" as we have other pension arrangements, but for exmaple I know of couples who've sold up and bought 2 smaller properties.

Conrad

lisyloo wrote: »

My personal experience is that not having a mortgage is life changing in terms of freedom, security and choices.
I think it's one of the biggest things most ordinary people can do to improve their life.
I don't mean so they can boast at dinner parties but have some freedom and security.

.

You describe the same sense of security that left-wing broadcaster on LBC Radio, James O'Brien describes. "If the wheels on your life fall off, particularly once into middle age, at least you have a nice fat asset to fall back on" (to fro example downsize to a much cheaper farm house in France where you might also be able to remodel the outbuildings for holiday lets).


In summary not only do you have a tax free asset, you also get to live in it! What more could one want.

abaxas

Conrad wrote: »

You describe the same sense of security that left-wing broadcaster on LBC Radio, James O'Brien describes. "If the wheels on your life fall off, particularly once into middle age, at least you have a nice fat asset to fall back on" (to fro example downsize to a much cheaper farm house in France where you might also be able to remodel the outbuildings for holiday lets).


In summary not only do you have a tax free asset, you also get to live in it! What more could one want.

Maybe an asset that hasn't devalued by 20-25% over the last few years and actually aids the economy.

lisyloo

I can't guarantee mine will always go up in value (especially if you are highly selective over the time periods :-), but I can borrow against it (currently 0.99% interest) to invest in things that do actually aid the economy.

I could invest a lot less if I was paying a mortgage or renting.
So sorry that argument doesn't stack up.

Loughton_Monkey

When did house-prices become a crucial indicator of economic well-being?

It's another fallacious question like "when did you stop beating your wife?"

House prices are not an indicator of financial health any more than, say, the price of cars, or computers, or eating out. It's far more complicated than that. For an individual, the 'cost' of owning his own house is not just the purchase price, but the difficulty in saving for the deposit, plus the cost of the mortgage, and all the other expenses that go with it.

I would, however, argue that at a personal level house ownership is a good indicator of financial health. Irrespective of the ups and downs of prices (and mortgage rates) over the 30 years or so of buying, the fact that someone has finally bought their own house is an achievement and at retirement, this person is more likely to be better off than continuing to rent....

I consider the value of my house as "paper money". My actual 'wealth' can realistically be measured only in the value of all my other cash assets like savings, investments and pension income.... If my house increases in value by £50K this year, all well and good. It could drop £100K the following year. My income/expenditure remains totally unchanged so nothing else really matters.

The only way it can change my actual wealth is if I sell, downsize, or otherwise extract equity from it. Until that point, the actual value is rather academic to my financial health. It is the fact that I own it that makes me more wealthy by not having to pay rent.

wotsthat

Loughton_Monkey wrote: »

The only way it can change my actual wealth is if I sell, downsize, or otherwise extract equity from it. Until that point, the actual value is rather academic to my financial health. It is the fact that I own it that makes me more wealthy by not having to pay rent.

A number of the 'bears' had pointed out that homeowners treated their houses like cashpoints. It seemed like a good idea so I had a cashpoint fitted to the front of my house.

Worth considering - no more waiting to sell, downsize or die to extract equity.