08-01-2014, 01:28 PM
(This post was last modified: 08-01-2014, 01:30 PM by powerandtorque.)
(08-01-2014, 01:03 PM)C.A.R. Wrote: its value could go up or down...To be fair though, once you're on the property ladder the "value" only actually matters if you're looking to move - if you're not, in many ways it is academic as the house doesn't change and nor does your bank balance irrespective of what the on paper value is.
Even if you are moving, to some degree the value doesn't matter, as chances are if your house has doubled in price then so has anything you're looking to buy, and the same with price drops, certainly in the same area of the country.
The only time that you've got real problems is if you're looking to sell and the value has dropped sufficiently that you're in negative equity on the mortgage. Assuming that the economy doesn't take a major nosedive or the Eurozone implode, it's unlikely that anything you buy now will lose value in the near-medium term.
Rising interest rates will be more of a problem for most in the near-medium term, as they can't stay at the current low level if the economic recovery carries on the way it is IMO.
Obviously if you're looking to buy your first house, then increasing prices are bad news indeed given that they're massively outstripping wage inflation, effectively reducing your affordability on a month by month basis.
Renting is useful if you're moving around a lot for work etc and don't want to be tied down, but to a point it's a trap as you end up getting caught in a spiral where you can't save a sensible deposit to buy because you're paying rent each month (typically more than a mortgage on the same property would be) and because you can't save a deposit, you're having to keep renting.
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