December prices up 1.7%

chucknorris

lisyloo wrote: »

I don't get it chuck.
If the OP was buying a house anyway those fees apply anyway.
I think Peter is saying it's an EXTRA £5.5K, which only applies if Peter isn't selling as well.

He has already exchanged, so the price is fixed, and he asked if it meant that he had made (profit) an extra £5.5k, he hasn't, because to make profit you have to sell, and take into account all expenses. If he keeps the house he has of course 'saved' £5.5k, compared to if he was exchanging right now, but that will fluctuate at different times as the value varies. I think you understand, as you are very sensible, but it looks like you missed that he had already exchanged.

chucknorris

PeterPanic wrote: »

It doesn't matter how much you earn, the important thing is when you bought a house.

Spare a thought for some of those on the HPC website, not only could some of them have bought years earlier, but a few of them actually already owned, and sold their houses and started to pay rent, in the believe that they would crash. Even more unbelievable (but true) is that one person (Jonathan Davies) who did that was actually an IFA!

padington

Important to note also this is just one months data. The three month average is up only 2.5%. Yearly something 6.5% so better to take an average of that.

chucknorris

padington wrote: »

Important to note also this is just one months data. The three month average is up only 2.5%.

Do you know what the 3 month average was for London?

padington

chucknorris wrote: »

Do you know what the 3 month average was for London?

No but i think this is just Halifax data, final year figures yet to be in.

https://www.theguardian.com/business/2017/jan/09/uk-house-prices-surge-4000-pounds-december-2016

lisyloo

He has already exchanged, so the price is fixed, and he asked if it meant that he had made (profit) an extra £5.5k, he hasn't, because to make profit you have to sell, and take into account all expenses.

I understand but on paper his asset is up £5.5K.
I keep paper values of my pensions.
I am fully aware that these are paper values and can fluctuate, but bearing in mind that caveat I do feel I need the valuations to understand my financial situation and plan. (I don't actually track my property as it's a long term home and it's value is therefore fairly immaterial to me).
Provided someone is aware that the value isn't set until they crystallise and it can fluctuate (perhaps wildly) then I still think the guy is £5.5K up.
Clearly there are costs to sell, but these would apply anyway when you sell whether you are £5.5k up or not.


As long as you aren't basing any concrete plans (like buying a £5.5K car) on the paper value, then I don't see the harm if you understand what it means.
If I was never able to get any paper values of my pensions for 40 years I think my planning would be in very bad shape.


With my pensions what I plan to do is to move the investments into safer ones over a time period so that there is less risk of capital loss closer to the point of crystallisation, but without the paper value I can't estimate and plan when that would be.

chucknorris

lisyloo wrote: »

I understand but on paper his asset is up £5.5K.

Clearly there are costs to sell, but these would apply anyway when you sell whether you are £5.5k up or not.

His asset rising £5.5k and making £5.5k profit are two different things. He can't value profit on assets without taking the costs into account, so he couldn't say that he has made a £5.5k (notional) profit, because if he sold the house, when taking into account his costs he would have actually made a loss. You can't ignore the costs, they have to be taken into account, what he could correctly say is that his asset has risen £5.5k and recovered some of his costs. If he was forced to sell, he would be making a small loss.

Yes his asset is up £5.5k, but that rise hasn't yet covered costs. I too value all my assets on a spreadsheet, but on that spreadsheet all of my costs are also taken into account.

EDIT: We are differing here because we are both interpreting 'made' differently, to me that means you have either sold up with a £5.5k profit, or you could sell up and realise a profit, in which case it would be a notional £5.5k profit. He can do neither, because of his costs. Whereas you are interpreting it as he is £5.5k better off than he was before, but ignoring costs. I suppose both interpretations have some validity.

lisyloo

Yes - my interpretation was/is that he would be £5.5K better off if he sold now rather than last month - the costs being equal in both cases, but I agree that's not made/profit.

lisyloo

It doesn't matter how much you earn, the important thing is when you bought a house.

This is true in lots of areas of life.
I was lucky to have a free education and a partial maintenance grant and came out of uni with no debts - that was purely based on when I was born.
I chose to take a money purchase pension on advice at the time. With hindsight I would have been much better off choosing a job with a good final salary scheme and staying in that jobs as long as possible, but at the time I didn't know that.
A certain amount is down to when you were born, luck and the rest is down to how you apply yourself (people will disagree as to the percentages). Even having the ability and drive to apply yourself is often down to your circumstances (sometimes adverse).


It's a frequent topic as to whether older people had it easier.
Personally I would not to be young now but not everyone agrees.

kayfaz

chucknorris wrote: »

I too value all my assets on a spreadsheet, but on that spreadsheet all of my costs are also taken into account.

Out of topic, but would you mind sharing that spreadsheet with us? Obviously without your own data, just the template as I'm thinking of doing something similar and yours would be useful