Property prices rediculous.....

westernpromise

Encouraging that so many people here recognise that this is just inflation and not profit.

There is a remarkable number of people even here who think the two are the same and that if they bid up the price of my house I should be charged CGT on that 'profit'.

Property gloating's unattractive but property envy is actually worse.

HSVX

westernpromise wrote: »

Encouraging that so many people here recognise that this is just inflation and not profit.

There is a remarkable number of people even here who think the two are the same and that if they bid up the price of my house I should be charged CGT on that 'profit'.

Property gloating's unattractive but property envy is actually worse.

I don't really just see it as inflation. For example, if you have a house in the South East it would have gone up in value much quicker than other parts of the country. If you moved further north then you will have realised a profit due to the divergence of prices between the regions. You could only really view it as pure inflation if every time you sold up you just moved to an identical property next door.

ognum

Minrich wrote: »

Interest rates are the lowest they have ever been , hence borrowing is cheap , this causes the increase in prices as an extra 20 or 30k hardly costs any extra , if you can get the mortgage that is . First time buyers not being able to get a big enough loan is now a huge problem , the Help to Buy has made things worse and increased asking prices. Homes should not be used as investments , its is the occupier's HOME afterall. Prices desperately need a big correction .

I would add to this that while low interest rates are great for buyers it has left the generation coming up to retirement ( those dreaded boomers) and others with spare cash which is getting a low return ( I know there are other investments than property)

These people have jumped into property so if only we had half decent interest returns on savings the property market would stabilise as well.

westernpromise

HSVX wrote: »

I don't really just see it as inflation. For example, if you have a house in the South East it would have gone up in value much quicker than other parts of the country. If you moved further north then you will have realised a profit due to the divergence of prices between the regions. You could only really view it as pure inflation if every time you sold up you just moved to an identical property next door.

That's more or less exactly why it's just inflation though. If your house has inflated at south-east rates, then to replace it after selling it, you'd have to pay the same rates yourself.

The only way you can get and spend the inflation is by accepting less house. So if you buy in the SE for £100k and it inflates to £200k, while an otherwise similar house in the Midlands only inflates to £140k, you can either have a £200k house and no cash, or a £140k house and £60k in cash. You're not better off net because you've got less house to the tune of the extra cash you now have.

If your house has inflated more than otherwise identical houses (i.e. same location as well), then you do have a profit, in that you could sell, buy the same thing back, and have money left over. I suspect that is actually quite rare, though.