Is now really a bad time to buy?

Crashy_Time

Norman_Castle said:

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

Economic wealth is an accessible fund to trade with. Monetary wealth is net worth. The ability to earn is potential revenue but is not measured as wealth. "True wealth" can be anything you want it to be, in monetary terms it means nothing.

If you knew what you were talking about you would be able to explain.

 Most sensible people understand that a "wealthy" person can lay their hands on 100k easier and quicker than a "Non wealthy" person, it isn`t any more complicated than that really. Having 100k "equity" in your house doesn`t make you wealthy, for obvious reasons.

Crashy_Time

Parking_Eyerate said:

Crashy_Time said:

Parking_Eyerate said:

Crashy_Time said:

Getting_greyer said:

I always saw wealth as a stock. The net balance between assets and liabilities.  Is a  house an asset?   Depends on the circumstances.  The royalties example is more of a passive income from the asset of the copyright.  Whilst interesting not helpful to op so sorry for that.

The royalties example is a classic example of wealth from a one off effort that doesn`t need to be repeated on an ongoing basis, so real wealth (probably not a B-movie actor who did one great film though) the "passive income" idea was sold to the public by the real passive income players as BTL.

So it looks like you've now reverted to linking wealth to lack of effort, and added a new term of "real wealth". Please provide a source for your "standard" definition of wealth and explain how you differentiate wealth and "real wealth".

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

You can't do anything with a big chunk of your "earnings" though if you will always need them to pay rent, and you can't spend any of them if they are in a frozen fund. You also might be left only being able to spend a reduced % of them if stock markets crash. A superlative of wealth could be said to be not having to access funds because nobody else can sell the roof over your head.

1) Maybe try googling "royalty payment" and see how much effort is required after the initial creation process, think about the writers of the song "Yesterday", do you think the surviving one still gets paid, and how much effort do you think he has to make regarding being paid this royalty?
2) You are just trying too hard to have property not be an illiquid asset, it is, everyone knows this. The only fund of mine "frozen" in this crisis was a pension fund with property exposure, everything else could be traded quite easily.

1) Thanks for the advice but I am aware what a royalty payment is. What isn't clear is your characterisation of it as one of a few (the only?) form of wealth (or "true"/"real" or whichever adjective you choose next wealth). I think the Beatles sold the copyright for their songs long ago, in fact. Paul McCartney tried to get some rights back and settled out of court, so who knows who gets paid when 'Yesterday' is played. It isn't really relevant. In fact decent IP royalties are relevant to such a small proportion of people (successful artists/performers etc.) that I really don't know why you're so obsessed with it. Have you had a one hit wonder?
2) Another very transparent attempt at a strawman argument. I have never once said (and nor do I think) that you can immediately sell a house at the click of a mouse. What I have said is that is not relevant to wealth assessment. It is you that is trying too hard to deny that property is an asset and may be considered part of a person's wealth. According to you HMRC, divorce courts, bankruptcy receivers etc. must be deluded when they ask for details of property ownership, why don't you write and tell them how misguided they are?

Were you tempted to prove the 'liquidity' of your remaining assets when they crashed by 40%?

1) Yes, only a small proportion of people are truly wealthy, that is why it is a good example.
2) Yes, property is an asset, no one is denying it, it doesn`t mean everyone with a property is wealthy though because lot`s of people have property as an asset but only a small proportion of people can be described as "wealthy".
Any way you try to cut it, Granny Jones who owns her bungalow outright for years and can feed herself three decent meals a day isn`t "wealthy".

lisyloo

Crashy_Time said:

lisyloo said:

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

Yes you can.
imputed rent = the money you aren’t spending on rent every month for somewhere to live
Assuming you have income (earned or pension) you can have access to this money every month and either spend or save it.
100% once you own the property completely.

To a lesser extent along the way, but as mortgages are nominal there is an effect as soon as one of you gets your first pay rise
you appear to have taken this thread off topic for your own agenda.
whether now is a good time to buy or not depends on a number of circs and I’d say job security is a major one (some people e.g. critical care nurses, still have very secure jobs).

Most people buying now, at this bad time to buy, will be making monthly mortgage payments, maybe for 30 years in some cases and they will have exposure to interest rate risk in that time, the idea of buying in the early 90`s and staying put for 50 years until it is time to drift into the sunset with piles of money kept away from landlords is a picture that doesn`t really have any relevance for a buyer today, or for anyone in the real world who may have to or want to move a few times.At the start of this crisis you were predicting a "blip", nothing to worry about etc. etc. so why should anyone take the biggest economic step of their life based on your advice?

Interest rate risk can be covered with a fixed rate (I know you know this) so not sure why you are putting forward that argument.
paying a mortgage instead of renting is a totally real comparison today. Of course people move and there are transactional costs in doing so - so what, who said anything about staying anywhere for 50 years? not me, you take the majority of the equity with you when you move, people do it all the time.
just because you might want to move is not an argument to rent forever for most reasonable people.
for the majority of people not economically mobile it’s still better to buy that rent long term.
why on earth would landlords do it if it didn’t make money!???
im not giving advice or predicting anything except the mathematical certainty that mortgages are cheaper than renting (and get better tax treatment). That is obvious As landlords wouldn’t do it unless it was profitable.
btw - pensions should be the biggest economic decision, not a home 

btw - I never said anything about now being a good or bad time to buy. I said job security was a major factor.

lisyloo

Crashy_Time said:

Norman_Castle said:

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

Economic wealth is an accessible fund to trade with. Monetary wealth is net worth. The ability to earn is potential revenue but is not measured as wealth. "True wealth" can be anything you want it to be, in monetary terms it means nothing.

If you knew what you were talking about you would be able to explain.

 Most sensible people understand that a "wealthy" person can lay their hands on 100k easier and quicker than a "Non wealthy" person, it isn`t any more complicated than that really. Having 100k "equity" in your house doesn`t make you wealthy, for obvious reasons.

I had an offset mortgage where I could do that.
youre missing the fact that a mortgage can be a very cheap line of credit and if set up correctly immediately available.

You seem remarkably uneducated (Or out of date) about some aspects of finance,

why would anyone listen to someone that doesn’t Appear to know about fixed rates or offset mortgages?? And appears to believe people should line landlord pockets forever in fear of (shock, horror) having to move house??

Splatfoot

I'll never regret buying property. I have had a secure roof over my head since I first bought at 23. My mortgage for my house is cheaper than renting a 2 bed house where I live (I have 4/5 bedrooms). I can also make money renting out rooms. I have friends who rent and they have had no end of trouble, and have resorted to living in a van. You are always at your landlords behest unless you're 'lucky'
enough to get council housing. 

Norman_Castle

Crashy_Time said:

Norman_Castle said:

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

Economic wealth is an accessible fund to trade with. Monetary wealth is net worth. The ability to earn is potential revenue but is not measured as wealth. "True wealth" can be anything you want it to be, in monetary terms it means nothing.

If you knew what you were talking about you would be able to explain.

 Most sensible people understand that a "wealthy" person can lay their hands on 100k easier and quicker than a "Non wealthy" person, it isn`t any more complicated than that really. Having 100k "equity" in your house doesn`t make you wealthy, for obvious reasons.

As demonstrated in this thread most people understand wealth is measured by net worth and not by easy access to funds, as you said, it isn`t any more complicated than that really. Your understanding of wealth is naive and surreal.

Crashy_Time

lisyloo said:

Crashy_Time said:

Norman_Castle said:

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

Economic wealth is an accessible fund to trade with. Monetary wealth is net worth. The ability to earn is potential revenue but is not measured as wealth. "True wealth" can be anything you want it to be, in monetary terms it means nothing.

If you knew what you were talking about you would be able to explain.

 Most sensible people understand that a "wealthy" person can lay their hands on 100k easier and quicker than a "Non wealthy" person, it isn`t any more complicated than that really. Having 100k "equity" in your house doesn`t make you wealthy, for obvious reasons.

I had an offset mortgage where I could do that.
youre missing the fact that a mortgage can be a very cheap line of credit and if set up correctly immediately available.

You seem remarkably uneducated (Or out of date) about some aspects of finance,

why would anyone listen to someone that doesn’t Appear to know about fixed rates or offset mortgages?? And appears to believe people should line landlord pockets forever in fear of (shock, horror) having to move house??

Good luck fixing your interest rate for 30 years. Using a mortgage as a "line of credit" is shockingly bad advice and partly the reason the economy is in the state it is!

Parking_Eyerate

Crashy_Time said:

Parking_Eyerate said:

Crashy_Time said:

Parking_Eyerate said:

Crashy_Time said:

Getting_greyer said:

I always saw wealth as a stock. The net balance between assets and liabilities.  Is a  house an asset?   Depends on the circumstances.  The royalties example is more of a passive income from the asset of the copyright.  Whilst interesting not helpful to op so sorry for that.

The royalties example is a classic example of wealth from a one off effort that doesn`t need to be repeated on an ongoing basis, so real wealth (probably not a B-movie actor who did one great film though) the "passive income" idea was sold to the public by the real passive income players as BTL.

So it looks like you've now reverted to linking wealth to lack of effort, and added a new term of "real wealth". Please provide a source for your "standard" definition of wealth and explain how you differentiate wealth and "real wealth".

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

You can't do anything with a big chunk of your "earnings" though if you will always need them to pay rent, and you can't spend any of them if they are in a frozen fund. You also might be left only being able to spend a reduced % of them if stock markets crash. A superlative of wealth could be said to be not having to access funds because nobody else can sell the roof over your head.

1) Maybe try googling "royalty payment" and see how much effort is required after the initial creation process, think about the writers of the song "Yesterday", do you think the surviving one still gets paid, and how much effort do you think he has to make regarding being paid this royalty?
2) You are just trying too hard to have property not be an illiquid asset, it is, everyone knows this. The only fund of mine "frozen" in this crisis was a pension fund with property exposure, everything else could be traded quite easily.

1) Thanks for the advice but I am aware what a royalty payment is. What isn't clear is your characterisation of it as one of a few (the only?) form of wealth (or "true"/"real" or whichever adjective you choose next wealth). I think the Beatles sold the copyright for their songs long ago, in fact. Paul McCartney tried to get some rights back and settled out of court, so who knows who gets paid when 'Yesterday' is played. It isn't really relevant. In fact decent IP royalties are relevant to such a small proportion of people (successful artists/performers etc.) that I really don't know why you're so obsessed with it. Have you had a one hit wonder?
2) Another very transparent attempt at a strawman argument. I have never once said (and nor do I think) that you can immediately sell a house at the click of a mouse. What I have said is that is not relevant to wealth assessment. It is you that is trying too hard to deny that property is an asset and may be considered part of a person's wealth. According to you HMRC, divorce courts, bankruptcy receivers etc. must be deluded when they ask for details of property ownership, why don't you write and tell them how misguided they are?

Were you tempted to prove the 'liquidity' of your remaining assets when they crashed by 40%?

1) Yes, only a small proportion of people are truly wealthy, that is why it is a good example.
2) Yes, property is an asset, no one is denying it, it doesn`t mean everyone with a property is wealthy though because lot`s of people have property as an asset but only a small proportion of people can be described as "wealthy".
Any way you try to cut it, Granny Jones who owns her bungalow outright for years and can feed herself three decent meals a day isn`t "wealthy".

1) You still haven't provided a source for your "standard" definition of wealth, or "true" wealth etc. Wealth is subjective and if it is now your assertion that only people that earn royalties from world famous songs are 'truly' wealthy then that is ridiculous. 
2) I am glad that you have finally admitted that. Also, I have at no point said that everyone with a property is wealthy, I said it would depend on individual factors (yet another transparent attempt at a strawman argument presumably compelled by your vested interest (VI) condition).
Regarding "Granny Jones", however, that fits comfortably within one of your previous definitions of wealth (I know you have see-sawed about but it shouldn't be that hard for you to remember). I'll quote you below for ease of reference:
You highlighted this section of my post:

- if someone has sufficient means they might not need to work for a wage any more but that is to do with their level of wealth 

and then said this:
"You are getting the point I made now, we are talking about the definition of wealth, not about the "effort required to come by wealth".
So "Granny Jones" has sufficient means that she doen't need to work for a wage and thus, according to you, is wealthy. Moreover, if 'Granny Jones' feels that she is wealthy then who are you to tell her that she isn't?

Parking_Eyerate

Crashy_Time said:

Norman_Castle said:

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

Economic wealth is an accessible fund to trade with. Monetary wealth is net worth. The ability to earn is potential revenue but is not measured as wealth. "True wealth" can be anything you want it to be, in monetary terms it means nothing.

If you knew what you were talking about you would be able to explain.

 Most sensible people understand that a "wealthy" person can lay their hands on 100k easier and quicker than a "Non wealthy" person, it isn`t any more complicated than that really. Having 100k "equity" in your house doesn`t make you wealthy, for obvious reasons.

This is just completely daft. You are talking about the availability of liquid funds. I know that you are absolutely obsessed with liquidity but its meaning is not a co-definition of wealth.

Crashy_Time

Parking_Eyerate said:

Crashy_Time said:

Parking_Eyerate said:

Crashy_Time said:

Parking_Eyerate said:

Crashy_Time said:

Getting_greyer said:

I always saw wealth as a stock. The net balance between assets and liabilities.  Is a  house an asset?   Depends on the circumstances.  The royalties example is more of a passive income from the asset of the copyright.  Whilst interesting not helpful to op so sorry for that.

The royalties example is a classic example of wealth from a one off effort that doesn`t need to be repeated on an ongoing basis, so real wealth (probably not a B-movie actor who did one great film though) the "passive income" idea was sold to the public by the real passive income players as BTL.

So it looks like you've now reverted to linking wealth to lack of effort, and added a new term of "real wealth". Please provide a source for your "standard" definition of wealth and explain how you differentiate wealth and "real wealth".

Crashy_Time said:

Splatfoot said:

We are in the process of selling our house. I have bought and sold at profit 3 times in my life so far. This is the last time, after buying at the end of 2006 just before the crash, as the next house we buy will be with no mortgage. I would never have been able to earn as much money through working as I have done through property. If I'd been renting all these years, I would absolutely be kicking myself. 

You can`t do anything with your "earnings" though if it is always tied up in property, or if house prices crash? True wealth is something you can access when you need it without having to sell the roof over your head.

You can't do anything with a big chunk of your "earnings" though if you will always need them to pay rent, and you can't spend any of them if they are in a frozen fund. You also might be left only being able to spend a reduced % of them if stock markets crash. A superlative of wealth could be said to be not having to access funds because nobody else can sell the roof over your head.

1) Maybe try googling "royalty payment" and see how much effort is required after the initial creation process, think about the writers of the song "Yesterday", do you think the surviving one still gets paid, and how much effort do you think he has to make regarding being paid this royalty?
2) You are just trying too hard to have property not be an illiquid asset, it is, everyone knows this. The only fund of mine "frozen" in this crisis was a pension fund with property exposure, everything else could be traded quite easily.

1) Thanks for the advice but I am aware what a royalty payment is. What isn't clear is your characterisation of it as one of a few (the only?) form of wealth (or "true"/"real" or whichever adjective you choose next wealth). I think the Beatles sold the copyright for their songs long ago, in fact. Paul McCartney tried to get some rights back and settled out of court, so who knows who gets paid when 'Yesterday' is played. It isn't really relevant. In fact decent IP royalties are relevant to such a small proportion of people (successful artists/performers etc.) that I really don't know why you're so obsessed with it. Have you had a one hit wonder?
2) Another very transparent attempt at a strawman argument. I have never once said (and nor do I think) that you can immediately sell a house at the click of a mouse. What I have said is that is not relevant to wealth assessment. It is you that is trying too hard to deny that property is an asset and may be considered part of a person's wealth. According to you HMRC, divorce courts, bankruptcy receivers etc. must be deluded when they ask for details of property ownership, why don't you write and tell them how misguided they are?

Were you tempted to prove the 'liquidity' of your remaining assets when they crashed by 40%?

1) Yes, only a small proportion of people are truly wealthy, that is why it is a good example.
2) Yes, property is an asset, no one is denying it, it doesn`t mean everyone with a property is wealthy though because lot`s of people have property as an asset but only a small proportion of people can be described as "wealthy".
Any way you try to cut it, Granny Jones who owns her bungalow outright for years and can feed herself three decent meals a day isn`t "wealthy".

1) You still haven't provided a source for your "standard" definition of wealth, or "true" wealth etc. Wealth is subjective and if it is now your assertion that only people that earn royalties from world famous songs are 'truly' wealthy then that is ridiculous. 
2) I am glad that you have finally admitted that. Also, I have at no point said that everyone with a property is wealthy, I said it would depend on individual factors (yet another transparent attempt at a strawman argument presumably compelled by your vested interest (VI) condition).
Regarding "Granny Jones", however, that fits comfortably within one of your previous definitions of wealth (I know you have see-sawed about but it shouldn't be that hard for you to remember). I'll quote you below for ease of reference:
You highlighted this section of my post:

- if someone has sufficient means they might not need to work for a wage any more but that is to do with their level of wealth 

and then said this:
"You are getting the point I made now, we are talking about the definition of wealth, not about the "effort required to come by wealth".
So "Granny Jones" has sufficient means that she doen't need to work for a wage and thus, according to you, is wealthy. Moreover, if 'Granny Jones' feels that she is wealthy then who are you to tell her that she isn't?

Being able to feed yourself and go to the bingo once a week isn`t really how most people define wealth.