The housing boom

Haircut · 31 Oct 2007 at 14:42

Has anyone here actually made money from rising house prices?

After watching The Truth About Property last week and seeing this on the BBC website Link I was wondering if any OcUKers have done well?
I'm not talking about paper gains (i.e. your house simply rising in value) but about coming away with cold, hard cash because of rises in prices.

I'm of the generation where most of my peers have been screwed over by house prices and now several people I know are looking to move out of London to areas where prices are not quite so stupid because there is no chance to get onto the ladder/move up the ladder where they currently live.

nucastle · 31 Oct 2007 at 14:45

The only money was made by second home owners who sold after rises, or people who sold and downsized.

.... everyone else loves to whitter on about how much their own pile of bricks and laminate flooring is worth, but they'll never get to see the cash in their hand .... and more likely will grumble about house prices when they realise that to 'step up the ladder' costs a lot more than it used to.

MinDBlanK · 31 Oct 2007 at 14:47

The only time you will make money from the sale is if you buy a smaller and less expensive house than which you currently own.

I paid 36K for this house 7 years ago, valued at 60K now. (1 bedroom quarter villa!)

OK I stand to make 30K? wrong I need to spend probably more than that 30K than I would have 7 years ago to get a larger house.

The only money is in renovating and only if you stick to a tight budget. imo.

What is up with those teeth! haha

div0 · 31 Oct 2007 at 14:48

The only way to make cold hard cash out of the housing market is:

*buy a house, hope the market prices increase, then downsize
*buy multiple houses and hope the market price increases after you buy

Haircut · 31 Oct 2007 at 18:02

So why is it that most people see high house prices as a good thing then?

Obviously I don't want a house price crash as this would likely come with economic problems, but I'd be happy with house prices moving at the same rate as general inflation.
It seems that people see houses going up by 10-20% a year and think that this is good, even though it only benefits a small minority.

Glaucus · 31 Oct 2007 at 18:05

Haircut said:
So why is it that most people see high house prices as a good thing then?

As you can retire on it, when you sell it and downside,
you can re mortgage at a higher price and thus get the money in your hand.

I would love a housing crash. It's not going to happen though.

scorza · 31 Oct 2007 at 18:08

Haircut said:
So why is it that most people see high house prices as a good thing then?

Rising house prices generally indicates consumer confidence in the economy. Agree that "high" house prices is not a good thing, and people who are claim to be happy with high prices are as short-sighted as those who claim to want a house-price crash...

Haircut · 31 Oct 2007 at 18:08

AcidHell2 said:
As you can retire on it, when you sell it and downside,
you can re mortgage at a higher price and thus get the money in your hand.

I would love a housing crash. It's not going to happen though.

Did you read the article though, less than a fifth of people plan to actually do that.
For the majority of people huge house price rises are not a good thing.

Glaucus · 31 Oct 2007 at 18:12

Haircut said:
Did you read the article though, less than a fifth of people plan to actually do that.
For the majority of people huge house price rises are not a good thing.

no they benefit when they retire, not at the moment.
A lot of people re mortgage thus higher the value the better.

At the end of the day it doesn't benefit most people, however it's nice to be sitting on a big wad of money.

scorza said:
house-price crash...

My job's secure

.

Anewbe4u · 31 Oct 2007 at 18:13

I'm in two minds. I was lucky that my nan gave me some cash to help buy a flat.

In 3 years its supposedly gone up in value 50 odd k. I know its not exactly a problem but I don't know if I should just get out now, save the money, maybe look for another place.

Glaucus · 31 Oct 2007 at 18:15

Anewbe4u said:
I'm in two minds. I was lucky that my nan gave me some cash to help buy a flat.

In 3 years its supposedly gone up in value 50 odd k. I know its not exactly a problem but I don't know if I should just get out now, save the money, maybe look for another place.

all the other places have also gone up, so it's pointless selling.
It's also pointless saving it as you should have to rent and it's very unlikely we will have a crash, despite everyone banging on about it for over a decade.

Anewbe4u · 31 Oct 2007 at 18:26

So basically I'm in a no win situation?

I should have read the article.

Glaucus · 31 Oct 2007 at 18:27

Anewbe4u said:
So basically I'm in a no win situation?

I should have read the article.

it's not really no win, you just can't get at the cash.
Unless you emigrate. Or downsize.

Raymond Lin · 31 Oct 2007 at 18:35

nucastle said:
The only money was made by second home owners who sold after rises, or people who sold and downsized.

.... everyone else loves to whitter on about how much their own pile of bricks and laminate flooring is worth, but they'll never get to see the cash in their hand .... and more likely will grumble about house prices when they realise that to 'step up the ladder' costs a lot more than it used to.

Exactly, all those that says "more house has gone up so many Thousands..blah blah". So what, regardless of it worth £1 or £1 million, he still live in it just the same. Pay Mortgage just the same (provided the interest rate don't change much).

Only people who make money are developers, people who do up homes and sell it, and those that buy to let and then sell later on.

The Mad Rapper · 31 Oct 2007 at 18:38

AcidHell2 said:
all the other places have also gone up, so it's pointless selling.
It's also pointless saving it as you should have to rent and it's very unlikely we will have a crash, despite everyone banging on about it for over a decade.

No offence but you have no idea what will happen. Read any of the main newspapers and you'll see that not only is a crash imminent, but it could be just as bad as the last one. There have been so many indicators even in the last month that it's blatant. People paying their mortgages on their credit cards is just one!

The housing market is a stack of cards, it takes only one or two to fall and the whole lot may come down.

Glaucus · 31 Oct 2007 at 18:51

The Mad Rapper said:
No offence but you have no idea what will happen. Read any of the main newspapers and you'll see that not only is a crash imminent, but it could be just as bad as the last one. There have been so many indicators even in the last month that it's blatant. People paying their mortgages on their credit cards is just one!

The housing market is a stack of cards, it takes only one or two to fall and the whole lot may come down.

No I don't no what's going to happen nor do you, how can you say a crash is imminent?

when it comes to the housing market it's all personal opinion.

sunama · 1 Nov 2007 at 03:13

The Mad Rapper said:
No offence but you have no idea what will happen. Read any of the main newspapers and you'll see that not only is a crash imminent, but it could be just as bad as the last one. There have been so many indicators even in the last month that it's blatant. People paying their mortgages on their credit cards is just one!

The housing market is a stack of cards, it takes only one or two to fall and the whole lot may come down.

Thats exactly the same sort of comment seen on this very forum, about a year ago and a year before that. If you go over to housepricecrash.co.uk, you will read same comment, predicting a crash for the last 5yrs. The fact of the matter is that house prices are steadily rising and have been doing so since 1996/7. Graph. That is a fact. I think year on year house price inflation for the uk is around 8.7% right now. Graph. Unless prices take an unprecedented nosedive in the next few months, I doubt that a house price crash will be "imminent".

MinDBlanK · 1 Nov 2007 at 03:22

Unless wages increase dramaticly I cant see how the market can keep climbing at these levels. Eventually only the very rich will be able to afford
a decent sized house for a regular sized family.

A morgage of say £800 a month is a LOT of money to a LOT of people but sadly it is almost the norm for a new/newish house these days where ever you buy.
Its frightening tbh.

setter · 1 Nov 2007 at 03:25

i work in the construction industry, and in my area the price of new houses has risen so much that people simply cant afford to buy new, a lot of local builders have had to lay off large numbers of staff and cut down on subcontractors, im a decorator by trade and most of our work till recently, was newly built houses but as the last few months were doing less of this type of work and older people i know from work are saying this is the worst slump in the industry in the last 20 years

Clipsey · 1 Nov 2007 at 03:41

People who flip houses make some quick and tidy cash!