'Squaring the house price circle' blog discussion

Annpan

jamtart6 wrote: »

I think I am said vulture!

Hope you're not offended Jamtart6, but when you get your first property and have done it up and spent alot of money on it and done without nice cars, holidays and feather beds, you'll change into a protective housetart and won't want any hiccups in the housing market to upset your nestegg! Don't miss the boat though will you. I wouldn't want to think of you with nowhere to roost.

avis

Poacher57 wrote: »

I've just been reading Martin's Blog in which he summarised his talk on Radio 1. He stated that a house is an asset. I have been on many financial management courses and read lots of blogs and I think there is an argument to say that a house cannot be classed as an asset until it is completely paid for i.e. without mortgage. Until that time it is a liability and a very big one at that. Any other opinions on this??;)

A house is absolutely an asset - albeit a leveraged one if you have a mortgage.

From a asset/liability perspective, it is no different to buying shares using loaned money or buying a company by borrowing (LBO). All are assets funded by leverage.

The asset prices can go up or down but the liability remains... and that is where you as the owner of the asset is at risk (magnified by the leverage).

Given the house price bull run for so many years, the expectation is that it is an asset which will never reduce in price and so it is ok to leverage 100%. But reality strikes - even if it is only once in 10years!

Tomlad

cheeky_lil_monkey wrote: »

first time buyers are needed on the market - without first time buyers, people like me can't move on to being 'second time buyers' so our property prices are falling and are going to get to the point where a lot of us need to stay here rather than move, so then there will he a shortage of available homes for first time buyers.....which means those available are going to go up in price again........and you won't necessarily get the bargain you're after!

right....let me get this straight.

As someone not yet on the property ladder, with no hope of ever affording my own house at todays prices, I should knacker myself financialy so that you can have the opportunity to move up the ladder / not loose your deposit. My heart bleeds.

On another note. What is it with this whole "you'll miss the boat" cliche. I can't believe its still alive and kicking given the falls that have been seen in the housing market. Are people really trying to say that no generation after their own will ever be able to afford to buy their own house?

Oooh and another argument that baffles me - "house prices only go up over a long period". True. But then earnings only go up over a long period of time. What we should be looking at is the price of houses relative to earnings. Funnily enough prices vs earnings don't only go up. They reach a peak then drop drematically to pick up again later, forming a cyle every couple of decades.

Wake up!

Rant over

silvercar

At what point after buying their home do FTBs, STR (sell to renters) & WIWers (waiting in the wings, cheque book ready) want house prices to increase?

sue_46

vickyo wrote: »

We have a small terraced house, an ideal first time buyers house. I found out that I was pregnant so we put the house up for sale and have had no interest whatsoever! Now we are wondering whether we should try to rent our little terrace out to buy somewhere bigger, but this seems risky. What do the Money Savers think? Jnr is due in just 4 months!

I just re joined this forum, im in Brighton and love Martins Money website, my son is trying to become a first time buyer, started saving in april 08 with his GF, both working.. and location is always an issue working in Brighton is ok but living there is expensive then you have travel expenses and getting up earlier to get into Brighton if you buy outside the centre....I myself have gone into BTL i hope i dont get eggs thrown at me here

Sue:j