Why do people feel so strongly about buying a house?

[poppet2 13]

 

People generally would rather buy a house as they see it as owning an asset, but it's only an asset if you earn an income from it, otherwise it's a liability.

 

Do you mean if you keep the house as a BTL investment or just keep it as a home to live in, then downsize to a smaller property when you retire?

 

 

Equity is dead money unless you release it, preferably when house prices are high, to use on more investments.

 

Yes, but when house prices are high, so is the housing market as a whole during a boom. All property increases by roughly the same amount in the UK as the last two property booms proved.

Also, you may find yourself paying higher interest rates on the new property you purchase, when the interest on your current mortgage is, after twenty years minimal. Why saddle yourself with a costly house prices, mortgage and higher interest rates?

 

The only logic I can see here is if a couple have paid their mortgage and decide to downsize.

Edited August 30, 2012 by poppet2

[FACEBOOK 10]

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Edited January 14, 2013 by FACEBOOK

[poppet2 13]

I was talking about when people buy a house to live in, they generally feel that their home is an asset, but it's only an asset if it makes them an income, and as it doesn't make them an income, but in fact costs them money, (unless they have lodgers), then it's really a liability, (mortgage payments, home improvements, re-decoration, bills etc).

 

So does it make any sense to work like a slave for decades to pay for this asset which isn't really an asset. The only way for these people to realise the fruits of their "asset" is to downsize after years of paying off their mortgages. And to achieve this they have to move out of their home, which they may love, to go and live out their retirement years in what is probably not as good an area just to get their hands on some cash, which they now want to enjoy by spending it on vacations and a new car or whatever so in effect they are now spending the principal which is really sad. Had they invested wisely during their lifetime, the income from their investments alone would now pay for all this crap. or, they could sell up and cash out all their investments for a huge payday. Equity is dead money if you do nothing with it.

 

You cannot have it both ways FACEBOOK. In your post 36 you stated that, ' long term renting was a bad idea'. So what are people suppose to do? I must say you surprise me, you sound as though you are against home ownership, which seems most unbecoming of you!

Edited August 30, 2012 by poppet2

[FACEBOOK 10]

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Edited January 14, 2013 by FACEBOOK

[JButts 10]

House not an asset!!!!!!

 

What is the definition of an asset - a single item of ownership having exchange value. (Dictionary.com).

 

Shocked....

[chem1st 10]

House not an asset!!!!!!

 

What is the definition of an asset - a single item of ownership having exchange value. (Dictionary.com).

 

Shocked....

 

House is both a liability and an asset.

 

A mortgage is a liability.

[JButts 10]

House is both a liability and an asset.

 

A mortgage is a liability.

 

That's right, the mortgage is the liability and, like i said, the house is an asset....

[FACEBOOK 10]

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Edited January 14, 2013 by FACEBOOK

[JButts 10]

How ridiculous... On that note.....

[chem1st 10]

That's right, the mortgage is the liability and, like i said, the house is an asset....

 

The house is both a liability and an asset.

 

It is a liability in the sense it needs repairs and maintenance.

 

But also council tax, SDLT, crime, local economy, weather and changes to the law.

 

A caravan is liability and an asset also - but much less of a liability than a house.

[Squiggs 11]

Not forgetting that in the worst case. the house becomes totally the BANK's asset and any negative equity your liability

[poppet2 13]

So the only way out is to purchase a property with cash and no mortgage.

Not many have this option. The only other option is to inherit the house your parents leave you in their will. However inheritance tax of 40% above the total assets of £230K will mean you require a loan from the bank to pay the inheritance tax or this could mean the loss of the property if the bank refuses to give you the loan to pay HMRC.

If you live in London, you've had it.