Just bought a new apartment will it gain value?

Davesnave

Teamocil wrote: »

Buy a home to live in.

Was there anything in the original post to suggest the poster wasn't planning to live in the flat?

Yes, it was a lazy question, but your answer is equally facile.

It makes very good economic sense to buy a home that will outperform the general level of HPI. It's a very MSE thing to do.

I challenge you to explain why it would be better to buy something likely to depreciate relative to house prices in an area.

The problem is, of course, spotting such a property, especially when you're a FTB.

Crashy_Time

Davesnave wrote: »

Was there anything in the original post to suggest the poster wasn't planning to live in the flat?

Yes, it was a lazy question, but your answer is equally facile.

It makes very good economic sense to buy a home that will outperform the general level of HPI. It's a very MSE thing to do.

I challenge you to explain why it would be better to buy something likely to depreciate relative to house prices in an area.

The problem is, of course, spotting such a property, especially when you're a FTB.

Fools game, not really possible to predict IMO, a bit like average investors thinking they have some kind of "edge" in the stock market. Cheap credit boosted the market and higher interest rates are going to deflate it is all someone really needs to know at this point. IMO the new apartment is going to lose money.

Davesnave

Crashy_Time wrote: »

Fools game, not really possible to predict IMO, a bit like average investors thinking they have some kind of "edge" in the stock market. Cheap credit boosted the market and higher interest rates are going to deflate it is all someone really needs to know at this point. IMO the new apartment is going to lose money.

If you read my post properly, you will see that I said the difficulty is spotting a property that will beat the market, which is quite similar to what you're saying.

However, just because it's hard, doesn't make choosing a property carefully, with the market in mind, a pointless thing to do. If I did it, others can too.

I'd agree, within the time frame of 5 years, a small, new build FTB flat isn't going to be a great investment without some very special extra factor operating....and the OP didn't mention one.

seven-day-weekend

Just for the OP's information: In January 2016 I bought a flat for £85k. Its selling price when new (April 2014) was £99950.

As others say, it was no longer new, the estate is still not complete even now. Having looked at the sale price of similar flats on the estate, it looks as though they are now just about reaching the original value. The lease remaining is 120 years, so not a problem.

Thrugelmir

NathanGent wrote: »

I was wondering if the apartment I'm about to buy is likely to increase in value and gain more equity for when me and my partner want to move to a bigger house in 5 years time?

If it does. The gap to the property you wish to purchase will widen. Your best hope is that property prices don't rise. Meanwhile overpay the mortgage by as much as you able. Thereby building real equity, not notional.

ReadingTim

Crashy_Time wrote: »

Fools game, not really possible to predict IMO, a bit like average investors thinking they have some kind of "edge" in the stock market. Cheap credit boosted the market and higher interest rates are going to deflate it is all someone really needs to know at this point. IMO the new apartment is going to lose money.

But Crashy, you play the fool so well...

Crashy_Time

Davesnave wrote: »

If you read my post properly, you will see that I said the difficulty is spotting a property that will beat the market, which is quite similar to what you're saying.

However, just because it's hard, doesn't make choosing a property carefully, with the market in mind, a pointless thing to do. If I did it, others can too.

I'd agree, within the time frame of 5 years, a small, new build FTB flat isn't going to be a great investment without some very special extra factor operating....and the OP didn't mention one.

The number of people who have done this is miniscule, the average person just wanted to "get on the ladder" and took whatever loan was available to do so on a basically average house. Depending on Brexit, interest rates and their debt load they will find out in the future if this was a good or a bad financial move. I don`t know the story of your house and why it is a "market beater" so I can`t comment on that.

Davesnave

Crashy_Time wrote: »

The number of people who have done this is miniscule, the average person just wanted to "get on the ladder" and took whatever loan was available to do so on a basically average house. .

As someone with a degree in a 'useless' subject, geography, I don't think selecting a house that's a good bet at any level is that hard. One just applies the principles of human geography, which is about the pushes and pulls that cause people to locate in one place rather than another, or to value particular places.

You don't really need to be a geographer to avoid buying daft houses in daft places, but people do!

I'm just not with the sloppy thinkers who advise, "Buy a home to live in," as if people should randomly select something and hope for the best. Of course the house has to be an enjoyable home first, but that doesn't exclude it from becoming a type of investment too. Either way, people will pay dearly for ownership.

The main reason why my wife and I can live as we choose in retirement is because we spent time and energy getting our other houses right. We also rejected literally dozens of properties when it came to that 'final' house move. In fact we went rented to avoid making a forced decision, and what we bought didn't arrive for us neatly packaged. It never does!

Crashy_Time

Davesnave wrote: »

As someone with a degree in a 'useless' subject, geography, I don't think selecting a house that's a good bet at any level is that hard. One just applies the principles of human geography, which is about the pushes and pulls that cause people to locate in one place rather than another, or to value particular places.

You don't really need to be a geographer to avoid buying daft houses in daft places, but people do!

I'm just not with the sloppy thinkers who advise, "Buy a home to live in," as if people should randomly select something and hope for the best. Of course the house has to be an enjoyable home first, but that doesn't exclude it from becoming a type of investment too. Either way, people will pay dearly for ownership.

The main reason why my wife and I can live as we choose in retirement is because we spent time and energy getting our other houses right. We also rejected literally dozens of properties when it came to that 'final' house move. In fact we went rented to avoid making a forced decision, and what we bought didn't arrive for us neatly packaged. It never does!

That is what many (most?) people have done though? Most people live in cities where houses are similar through various ranges of "good"/"bad" areas and believing that house prices would always go up they took the biggest loan they could get for the best house they could afford, hoping to obviously move on to bigger and better later (not properly thinking through that if theirs is getting more expensive then so is the next purchase) Randomly grabbing just about anything available to "get on the ladder" is how bubbles start and grow, and it is why the UK is in the present mess it finds itself. I get what you are saying though, but I still feel it is thinking that strays too close to the average investor mistake in equity markets of believing in a personal "edge" regarding certain companies, sectors or asset classes. IMO it is a very rare house that will avoid losing value in a proper price correction, and a very rare buyer who will spot that opportunity before others do.