Conclusions on becoming a homeowner

recently bought a place for a decent price after years of saving and searching. Thing that surprises me most about home ownership is that I do NOT want prices to go up! It’s completely meaningless.
If I never leave then I’ll never care.
If I trade up in a high market I’ll have to save more or take on a bigger mortgage to cover the difference.
But if there was another crash and I wanted to trade up I would not have to borrow as much to do it.
We narrowly escaped the mini bubble and should be revelling in our positive equity but instead it’s meaningless.

High house prices are poo.

I’m a home owner as of very recently and never trading up and I don’t think high house prices are good for anybody, including myself. Then again sometimes they’re unavoidable, or should I say, not enough is done by the powers that be to keep them down or realistic.

Same as above - bought last year - hope prices stay the same/go down. If they keep increasing there’s more likelyhood of me losing my job in next crash

Bought 2 years ago, high house prices mean a higher chance of my kids emigrating in 20 years time or else hanging around with us in the house when they are in their 20’s.

+1, to all of the above. Annoys me when its assumed you are a bull cause you bought. All of the reasons above make sense as to why I’d just like stable house prices. I’m just not sure that’s going to be the case though. The market seems extremely sentiment rather than fundamentals driven

You might feel differently when aged 65 with a house worth several times your miserable pension.

you took the words right out of my mouth

Fine sentiments and I’m sure they would be echoed by most right-thinking, civic-minded people.

It’s worth thinking about though. If you can buy and never need to move from your accommodation, you’re grand. I’m not totally convinced that everybody being in a position to buy the only accommodation they’ll ever need (as opposed to want) first time off the bat is realistic though. Be great if it was. Certainly many people are in this fortunate position. And a market where waiting to reach affordability is seen as natural, rather than jumping in ‘to get on the ladder’ makes much more sense. Effectively it means the stock of potential accommodation for private buyers does drop though, because fewer people would buy an apartment or 2-bed because the myth of the ladder has been busted, and you need to future-proof your purchase.

So really the only people who can object to a stable market are those who a) have suffered a big drop in the value of their home, either past or at some point in the future and b) need to realise that loss. Of course, there are still quite a few of those people around you know…

If house prices tracked, or even were slightly behind inflation you’d still have a reasonable asset regardless.

Is it not just greedy/selfish to want house prices to beat that by 5%+ at the expense of younger generations (including your own kids).

It’s the buy to lets crew who need capital appreciation to build their equity and grow their little empire.

I’m not making any moral judgements. I’m just saying that people’s opinions generally track their own priorities at whatever stage of life they’re at, and that it’s easy to be sanguine when you’re at peak health and earning capacity.

Rising house prices in my old age won’t help me if I’m already buying the home in which I intend to die. I couldn’t realise the value of that rise, since I’d have to blow it all straight away on another expensive home. I’d rather have low prices the whole time and be able to put the product of that peak earning capacity into liquid assets that I can spend down when I’m old, instead of an expensive house that I can’t spend in practice.

What was that wonderful scheme called back in the day when the over 65s could release equity in their homes and have a glorious retirement?

Don’t hear much about it nowadays, do we?

Right, so trading down and equity release don’t exist now? Most of the houses I view are family homes being sold by people trading down after kids are grown up. It was a thing, it is a thing, it will continue to be a thing.

I have paper (electronic) assets and equity in a house. I wouldn’t to rely on only having only one or the other. You don’t know stupid until you’ve invested in stocks and bonds.

I was referring to a particular scheme during the false Celtic Tiger era whereby people STAYED in their home but signed up for equity release which would be paid back when the home was eventually sold. Came with lots of warnings about independent legal and financial advice etc. A glorified highly expensive mortgage dressed up as something else to say the least.

The great thing about eventually owning a house is that I won’t have to pay rent, but it will be difficult to realise its value. I also have a big pile of cash, so the one thing that really does worry me, more than a stock market crash, is inflation. Unfortunately, in the event of that inflation, having bought a house won’t help me much, even if housing outperforms inflation, since I’d still have to sink the sale price in buying or renting a new home (unless, of course, rents significantly under inflate).
The only real reason to sell a house, once bought, is if I need to move for work. In that case, I’d like it to be as small a part of my portfolio as reasonably possible, for flexibility. Trading down doesn’t really come into it, since I would have no intention of buying a home bigger than I need.

At present, I’m just about able to retire, as long as I stay clear of Dublin and buy somewhere cheap, so that I can stop paying rent. I haven’t taken the plunge of buying a house, because I want to keep working and as I work in a relatively specialised field, I have a small pool of employers and don’t really want the inconvenience of being tied down to a location by a house.

My strategy is simple. Live as cheaply as possible, accumulate as few fixed illiquid assets as possible, accumulate a big pile of cash and hedge it with the biggest pension fund I can afford or am legally permitted to accumulate.

I do sometimes wonder if I should diversify into guns, beans and gold… :wink:

And in the meantime, if you can’t pay the mortgage just pay what you think you can afford. It’ll be grand.

And that’s where the scary inflation comes in, when the banks instead have to print the money that their debtors haven’t been handing over. :open_mouth: :laughing:

Banks print money by issuing loans and unprint money by accepting repayments, so you’re right in the sense that continuing to issue new loans while forebearing arrears increases the money supply, but I think the high SVRs suck the money right back out again.

If you were right then we’d have had consumer price inflation the last few years, and we haven’t. Only housing price inflation.