How much false wealth is in the UK as a result of house prices?

PasturesNew

JonnyBravo wrote: »

You've quoted nice figures.

Thing is.... so far.... none of that has happened.
(ok yes you've done the selling bit.... that's not the crucial part though is it?)

Is it likely to happen? Yes, IMHO. Is is certain? No.

Does that mean inflation only affects you if you are "changing asset class"? No.

I can see where you're coming from on that.
And yes there is always a gamble.
But I hated the house and the area. Neither had anything for me, so I had to sell, it was just a question of when.

And I moved to an area where there is 20x the property available - and a bit cheaper. I can buy in at any point I want, no mortgage required. So less of a risk than somebody doing it who would also need further leverage to get back on the ride.

Pobby

Good post this.I view my assets this way.1.Savings and current accounts full liquidity2.Investments a little less liquidity but it`s there if an emergency happened but hopefully that would be covered by 1.3.Pension,pretty illiquid but in dire need could always draw on the tax free 25%4.My home.Not liquid as I need somewhere to live.It would only realise it`s value if I died and it was sold(no good to me)or should I chose to down size.

The last thing I would consider is using my home as an atm machine.The price of it has gone up by nearly 400% in 10 years.Note I said price,not value.The``price`` is what someone is prepared to pay for it.

PasturesNew

Pobby wrote: »

1.Savings and current accounts

I have some

Pobby wrote: »

2.Investments

I have none

Pobby wrote: »

3.Pension

I have none.

Pobby wrote: »

4.My home

I don't have one, but [1] covers this when I decide on one.

My wealth is small by most people's standards. But I have no needs or wants that can't be met with just a couple of quid usually.

Sapphire

PasturesNew wrote: »

I've only ever counted my wealth in terms of "how much cash can I draw out of the bank within a week if I have to". Houses to me never counted as you can't touch it and have no idea how long it would take to liquidate.

I have nothing on credit.
I have no credit cards.
I have £0 debt.

As I survey all around me, I know I own everything I can see. Everything. Outright. I estimate to completely replace everything I own brand new would cost me no more than £1000. Max! More than likely I could do it for £600.

Yes, not a lot is it. My cash is in the bank(s) and so none of it is fake wealth. And I have no need or desire for "things".

Totally agree with you. That's how I operate as well – nothing on credit, no credits and zero debt (apart from a very small mortgage that I am overpaying and could easily pay off in one go if I had to). I've always been paranoid about being in debt.

However, although I own everything I see around me, replacing all the stuff would cost far more. One thing I have been doing for a while as a possible hedge against inflation was to buy things I like very much (not on credit), but that might also have some value to them if I was forced to raise money. I have savings (including ISAs) as well, but do not gamble with investing in shares or other such vehicles.

Austin_Allegro

I'm definitely one for the cashback credit card, because:

a. I get 1% cashback
b. I get to keep the cash in my current account for longer, thus gaining interest;
c. I use it for company expenses, which I can claim back a day or so later, meaning I have even more cash in my current account earning interest.
d. I get protection on purchases and free travel insurance
e. I don't have to worry about big wads of cash that might get lost/stolen