Why Is Continually Rising House Prices Considered A Good Thing?

[dave50]

and why if they stagnate or fall it's bad? Surely there must come a point when first time buyers will no longer be able to get on the housing ladder so prices will then stop rising. A house is primarily for living in, not an investment.

[ummmm]

But loads of people invest in property. My neighbours both sides rent their houses.

[hereIam]

I think there are a lot of first time buyers already who can't get on the property ladder. I feel for them.

[douglas9401]

The heady mix of Phil and Kirsty, Jasmine, Jonny, Jules, That mad guy and Dion Dublin coupled with grasping lawyers, dodgy surveyors and lying estate agents all conspire to make a cheap pile of bricks and some pipe and cable a thing of wonder.

[Zacs-Master]

If you think of the economy as the human body, then Housing is a major organ. It generates masses of cash through the building of the houses themselves and keeps an awful lot of people employed who then go on tho pump their 'hard-earned' back into the economy. People then go on to spend a considerable amount of their income on furnishing / fitting out their houses, which also keeps many manufacturers afloat.

You are correct tho, there is a fast approaching hiatus where FTBs will not be able to afford to get a foot on the ladder. This is an opportunity for those who already have money to become landlords or expand their housing stock. This is one of the factors in the increasing rich / poor gap.

There are many more complex factors but a forum isn't really the place to go into them.

[spathiphyllum]

It depends on position. If you buy for £5 and prices raise to £6, you're in profit.

If you've not yet bought, then it just makes house prices more expensive.

It's good for property owners, not many other people.

[baza]

In the 70's my mortgage was 3 times my annual income, I dread to think how first time buyers cope with current prices.

[spathiphyllum]

"Surely there must come a point when first time buyers will no longer be able to get on the housing ladder "

Yes, we're almost there already.

[ToraToraTora]

it is for some not for others like most things.

[andres]

First house £120 sold it three years later for £150. I felt very guilty. Mind you that was in the 50/60s

[tamborine]

wages & salary increase, cost of materials, land, cost of living etc etc & devalue of £ due to brexit.

1st time buyers need to save (or borrow from parents) as we oldies have done.

[New Judge]

"In the 70's my mortgage was 3 times my annual income, I dread to think how first time buyers cope with current prices."

Quite so, baza. But in the 70s and 80s mortgage rates were a lot higher than they are now. When we bought our first house the repayments took all of mine and a good chunk of Mrs NJ's monthly salary. How many younger buyers can claim that today?

The root cause of the housing "crisis" is too many people. The country is importing a net quarter of a million people annually and they all have to live somewhere. Supply and demand means that prices will rise. When nobody can afford to buy they will fall.

[pixie374]

There will always be people able to afford them, and many owning several houses (buy to let is different). Rising house prices are a positive sign in that they show the economy is doing well, but not necessarily good for individuals.

[Baldric]

Mrs B and I own 7 houses between us, 6 are rentals, The two girls living with us, Tash and Nat each have a buy to let mortgage on a flat which they both rent out, system is good.

[david small]

My fathers house was £300 in 1962 sold it two and a half years later for £950. I paid £45,000 for mine in 94. Now valued at over £200,000. No point in moving as new/old house suitable would be lots more.

[pixie374]

I've just looked up the average house prices here, and it is around half a million. This is why my son is moving to Wales soon. I have no idea how they would afford it otherwise.
My daughter has a flat with a housing association, categorised as "affordable housing"- £850 a month.

[david small]

Madness pixie374 and worse frightening.

[pixie374]

It is for most people, David. She doesn't earn a lot more than her rent costs... and has a child.

[ummmm]

My daughter has just gave up her council flat. £102 per week and it's very small. Then bills on top.