UK house prices about to fall over the cliff edge. Recession to follow ?

In message , John Redman writes

Most people wouldnt actually do this calculation and, even if they did, they probably wouldnt set aside the difference in a savings account - The extra money would just get spent in the course of life on a budget.

Assuming I am correct, they would not earn any interest, nor would they have the money available in a lump sum at the end of the 10 years.

So.... whilst it is possible to argue that, given the specific timing of your transactions, (and your neighbours), renting would have generated more money, most people would have enjoyed its' benefit over the 10 years, and have no more to show for it.

Reply to
Richard Faulkner
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In message , John Redman writes

So you are down on the property £95,000 by selling, assuming that the mortgage would have equated roughly to the rent in these years.

Presumably you are selling the "something else", which I assume is your home, and will be renting for the foreseeable..... ?

Have you got a BTL aswell?

Reply to
Richard Faulkner

Demonstrating what? The dominance of "movers and shakers" in the world of BTL? BTL in the mid 20th century? BTL, the "massive iceberg"? That you have many friends with portfolios of over 100 properties?

I don't think you mentioned anything else - perhaps you could copy-paste here what you had in mind.

Reply to
curiosity

Well I would have hoped so but there seems to be no shortage of effort to get a few remaining stragglers on:-

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Reply to
curiosity

"John Redman" wrote> 105k - 105k = 0.

Hold on. If you count a drop in valuation from 85K to 59K a "26K loss" (as you have above), then you can't say that there's no gain when selling later at 105K!!

Conversely, if there is no gain later, then (according to the same principles) there was no loss before!

"John Redman" wrote

If the "bottom" exceeds the "top", then why do you insist it is a loss? Could you convince HMRC of that (for CGT, if it was an investment property)? I doubt it!

"John Redman" wrote

But you have 400K cash instead, so you are even (on that transaction alone).

"John Redman" wrote

As long as the transaction was made at market value, then the single act of buying the painting wouldn't incur a loss (or a gain). The bit that determines the amount of loss/gain is when you buy, **and then** hold for a while, **and then** sell later at a different price.

"John Redman" wrote

Of course it is. You can buy several other nice paintings which may also appreciate in value in the future.

"John Redman" wrote

You are better off than the alternative of not having bought the house earlier, because now you can afford the Ferrari. If you hadn't bought and then sold the house for a GAIN, then you might not be able to afford the Ferrari now!

"John Redman" wrote

Of course.

"John Redman" wrote

No, but holding on to something and then selling it later for more money does.

"John Redman" wrote

No, you would *not* "be up".

Compared with immediately before selling the PC, you'd be the same - either holding a 50 PC or 50 cash. Compared with immediately before buying the PC, you'd be worse off - to the tune of "buying price" less 50.

"John Redman" wrote

See above.

"John Redman" wrote

The "profiting" comes from the time that you hold the item (while it appeciates). Although you can only use that "profit" by selling & buying whatever else you want.

Reply to
Tim

"Richard Faulkner" wrote

That is indeed the likelihood.

Yep.

Reply to
John Redman

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