How risk averse are you?

grey_gym_sock

Glen_Clark wrote: »

Rents are a cost to the productive side of the economy which has to compete with countries where rents are far lower.

good point.

though i disagree with your proposed solution (in other posts). IMHO, we should:

a) build lots more council houses - enough that everybody who wants 1 can have 1, which reduces the potential corruption in handing them out - and removes the unfairness of most people having no chance of getting a council house unless they are in a priority group.

b) improve security of tenure, and control rents, in the private rented sector.

though i think we'd agree about not giving huge discounts on the market value to "right to buy" tenants.

BananaRepublic

Glen_Clark wrote: »

The number of people counting their house as wealth, even though they can't sell it, shows the trick that is being played on them. The Government can manipulate the housing market to increase housing costs, and con people into thinking they are better off. They are even counting rising house prices as 'Growth' and 'Recovery' as though it is industrial output that can pay off their debts!!!!.

I was under the impression that anyone who owned a house was free to sell it. Do correct me if I am wrong.

Lots of people use their home as an investment as well as a place to live. Lots of people downsize once the sprogs have fled the nest. Others retire and move away from London where housing is very expensive, to the sticks where you can buy a nicer house for half the price.

chucknorris

BananaRepublic wrote: »

I was under the impression that anyone who owned a house was free to sell it. Do correct me if I am wrong.

Lots of people use their home as an investment as well as a place to live. Lots of people downsize once the sprogs have fled the nest. Others retire and move away from London where housing is very expensive, to the sticks where you can buy a nicer house for half the price.

Absolutely, take our example, when my gf (at the time, now wife) moved in with me, I bought a house for us to live in for cash, she had no mortgage on her house, which she left her mother living in (sadly she passed away a couple of months ago). But that now leaves us with 2 homes worth approx £1.65m and neither is mortgaged, it would be ridiculous to argue that that does not contribute to our wealth, of course it does).

Glen_Clark

grey_gym_sock wrote: »

IMHO, the deficit that we should worry about is the trade deficit, not government debt. this is related to the government's approach of pumping up house prices, instead of backing manufacturing (which i agree is a huge blunder).

Is it a blunder, or is it deliberate?
Cameron & Osborne are well connected with the landed aristocracy who have done extremely well out of the rise in property & land values, and increase in rents which is a drain on the productive side of the economy. The Duke of Westminster has seen the Capital Value of his inherited property portfolio double from £35bn to £70bn in about the same time Osborne has doubled the National Debt to pay for it all. Investment has gone into property speculation instead of productive industry needed to pay off Osborne's debts, I believe that will lead to high inflation. It won't worry the aristocracy too much because their wealth is in property. The 'little people' will lose as usual - they will be holding Sterlng Cash because they can't afford to risk what they have and thought Cash was safe

Glen_Clark

grey_gym_sock wrote: »

good point.

though i disagree with your proposed solution (in other posts). IMHO, we should:

a) build lots more council houses - enough that everybody who wants 1 can have 1, which reduces the potential corruption in handing them out - and removes the unfairness of most people having no chance of getting a council house unless they are in a priority group.

b) improve security of tenure, and control rents, in the private rented sector.

though i think we'd agree about not giving huge discounts on the market value to "right to buy" tenants.

Well it would have been nice to have some assets to show to show for the National Debt - like Council Houses.
But the Government would make a mess of it like everything else. I believe in the free market. Government interference in the housing market is the problem, not the solution.
If they would at least stop strangling the supply with the world's most onerous planing system, whilst stoking up demand with taxpayers borrowed money, the housing and deficit crisis would improve on its own.:)

Glen_Clark

BananaRepublic wrote: »

I was under the impression that anyone who owned a house was free to sell it. Do correct me if I am wrong.

I'm not free to sell mine because I need it to live in.

Glen_Clark

chucknorris wrote: »

I know, I'm saying that it isn't risky because IMO it is beyond risky (i.e. even worse than merely risky)! On top of that when compared to shares in the long run, it just doesn't stack up. Currently I hold less than 1% in cash (although my wife does have a fair bit of cash in her portfolio, so there is an emergency source there on tap). But when I retire, I will hold more cash.

I have about 6% instant access cash, most of which is earning 1.7%. I don't really need it because I can liquidate shares in a week and use interest free credit cards till then. So I'm looking for a good time to top up my world tracker. When Flock of Sheep returns and predicts another crash I will be buying

chucknorris

Glen_Clark wrote: »

I have about 6% instant access cash, most of which is earning 1.7%. I don't really need it because I can liquidate shares in a week and use interest free credit cards till then. So I'm looking for a good time to top up my world tracker. When Flock of Sheep returns and predicts another crash I will be buying

Don't get me started on 'timing the market' I deliberately try not to think about it, I think it can be too tempting, and someone could easily be lured into making (what history proves to be) a bad decision.

nb73

Glen_Clark wrote: »

I'm not free to sell mine because I need it to live in.

Need, or want?

Presumably if push came to shove, you could sell your house and rent or buy somewhere else. Releasing the wealth currently tied up in it

bigadaj

nb73 wrote: »

Need, or want?

Presumably if push came to shove, you could sell your house and rent or buy somewhere else. Releasing the wealth currently tied up in it

If there was enough pushing or shoving you can always sell a kidney, many people though might think this wasn't wise.