Is it really THAT important to own your own home?

Generali

lieutenant_dan wrote: »

thoroughly depressing picture of modern day Britain in that post.

Overextend yourself to get onto the ladder (if you can in the first place that is) to stave off poverty in retirement.

It's a frightening prospect what lies ahead for this young generation if these house prices never mind don't correct and come down a bit, but come down considerably.

Massive gulf developing between the haves (multi property owners) and have nots too.

Wait and see what's in store. The pension Ponzi scheme is ready to implode before too long (the US should be effectively bankrupt within 40 years for example from what I understand).

Generali's long term asset value perspective (GLTAVP) is that the baby boomers selling up their assets (not just houses but shares etc too) will cause a long-term decline in asset prices.

It won't be buy the dips so much as sell the peaks.

Buy Index Linked Gilts!

The_Economist

I think i would say buy everytime if you can afford to. I agree renting is dead money. But i think the tables are slowly turning. With the pension and credit crisis at the moment, and in the years to come I'm not sure if anyone will be able to say that they own there house. Because they will probably have to sell it keep there heads above water. Because of the cost of heating lighting and food and the amount of taxes we have to pay.:mad:

SquatNow

Generali wrote: »

Wait and see what's in store. The pension Ponzi scheme is ready to implode before too long (the US should be effectively bankrupt within 40 years for example from what I understand).

40 years is a bit optimistic. 5 years is more realistic given the the pension funds have been dabbling in the cdo, mbs and cds markets.

And more importantly, I want to make this very clear.... House prices are also a ponzi sceme. In fact land speculation is the biggest ponzi sceme in the world.

It's NOT a housing LADDER it's a housing PYRAMID.

carolt

Having long term financial security which comes from owning your own home outright is important - but not that important.

Given the historically high levels of house prices at the moment, it is highly debatable whether buying now, as a FTB, without huge amounts of existing equity to offset the risks, is really offering security - on the contrary, it seems that instead of a landlord owning your home, the bank would - and you'd be risking not just a deposit of a month's rent or two, but all the thousands you'd saved for a deposit and the possible prospect of years of negative equity.

You say little about your circumstances - if your earnings are secure and very likely to rise, then maybe risking it and buying now makes good economic sense in the long term. But at the age of 32, there are - contrary to what this forum would suggest - more important things than the future direction of house prices. Don't let worries about being homeless when you're 65 be the main criteria in decisions you make about your life NOW. 65 is still a long way away....

Renting is fine. If you were 45 or 50, or prices were at normal levels, I would take a different view - but you're not and they aren't. In answer to your question 'should I stress out and overextend just to get onto the ladder when these prices are unrealistic and may well come down gradually anyway?' - DON'T stress out, whatever you do, and if you can genuinely afford it, have a place you really like and want to buy and that would do you for a good few years if the worst happens and you get stuck there by falling prices, then buy. But buying to be a lemming is not a good idea. We all know what happens to lemmings....

Oh, and nicely put, SquatNow....

Generali

SquatNow wrote: »

40 years is a bit optimistic. 5 years is more realistic given the the pension funds have been dabbling in the cdo, mbs and cds markets.

Most pension funds have a tiny proportion of assets in stuctured credit stuff. It's easy to get carried away by this IMO.

SquatNow wrote: »

And more importantly, I want to make this very clear.... House prices are also a ponzi sceme. In fact land speculation is the biggest ponzi sceme in the world.

I agree. Athough I suspect I have different analysis to you.

SquatNow wrote: »

It's NOT a housing LADDER it's a housing PYRAMID.

The thing to remember is that you need a house but you don't need a pension. You can work your self to the grave if necessary.

There's going to be a very interesting intergenerational conlict coming up if house prices remain where they are. The children of the Baby Boomers (CBBs) may well say, "Why the Eff should I pay your pension while you live in a house worth £xxx,xxx?". Then again, the same CBBs may be the recipients of that wealth.

The workers are the income generators, the retirees will increasingly be the votors. How that plays out will be key in the very long term.

Let us not forget JM Keynes: "In the long term, we're all dead".

lethal0r

yes! whats more important than having somewhere to live for free where you are the boss & no one tells you what to do? you can count on one hand what is more important than that.

dobbie82

I want to own my own home so that I can settle, seems all these buy to let landlords have gone for the 6 month extansions only route so you can never relax.

daft tenancy agreements with things like dont hang washing outside.. cost me a fortune in electricity running a tumble dryer!!

oh and I lived in a flat with not a single shelf in it, but the tenancy agreement stated that we were not allowed to put shelves up..?

when renting you cant alter anything so it never feels like home :-(

I apply for social housing but I feel I am number 1,499,999 in the 1.5 million on the list

Houses are 6-10 times the avarage wage here no chance of buying. (just moved back to wales from south lakes where it is 9-11 times the avarage salary!) But will live as cheaply as I can to save a deposit in the hope prices or 2 bed houses come down to the £100k mark

seven-day-weekend

Having paid for the house we have owned for over thirty years, it would be a backward step if we had to start paying out money again. Plus, we couldn't afford it as retirees.

Also, what about when renters get old, are they still going to be moving every two years?

I feel sorry for those young people who have no choice (if they have chosen to rent that is different). Our son is in this position. He doesn't earn anywhere near enough to ever buy a house (and would struggle to rent one on his own), which is why there will always be a home for him in ours, for as long as he wants it.

(edited for clarification and to avoid ambiguity!)

PasturesNew

dobbie82 wrote: »

daft tenancy agreements with things like dont hang washing outside.. cost me a fortune in electricity running a tumble dryer!!

I am not even allowed to do that. And there isn't one here. I don't want to go accumulating goods that I have to move at some future point. So it's the airer for me.

dobbie82 wrote: »

Houses are 6-10 times the avarage wage here no chance of buying. (just moved back to wales from south lakes where it is 9-11 times the avarage salary!)

I am in Wales. I find housing quite cheap overall. Although there are some grim bits! I moved from Cornwall where prices are 9-11x

dobbie82 wrote: »

in the hope prices or 2 bed houses come down to the £100k mark

No idea which bit of wales you're in, but a lot of them are that price already ... and falling! So keep saving... you'll make it.

PasturesNew

seven-day-weekend wrote: »

Our son is one, he doesn't earn anywhere near enough to ever buy a house (and would struggle to rent one on his own), which is why there will always be a home for him in ours, for as long as he wants it.

You should up his pocket money. At one he's got a lot of interesting toys that make squeaky noises to pay for.

It's probably not a good idea to send him out to rent, as he's only one.

As long as he wants it ... or until he turns 10. Then he should go out and get his own place