New build is worst buy-to-let investment, experts warn

[Euro-commuter]

I think the difference is more fundamental than this - you buy house with morgage which means you are in debt, but you buy equities with cash - you not incurring debt to get them, unless you are a hard core gearing speculant in which case you'd get all you deserve for borrowing money to speculate on a stock market, which is a con, but that's another story.

You put in the same amount of money per month, either to share purchases or to mortgage repayment. Either way, your equity increases steadily over the period. With property, you also have (nominally) full ownership from the start, but also a decreasing debt, mirror-image of the increasing equity; with equities you have neither of those.

There are really 4 asset classes in the subject here:
1. Equities bought cash.
2. Property bought cash.
3. Property bought on credit.
4. Equities bought on credit.

I think we all agree that #4 is a Weapon of Mass financial Desctrucion, so let's forget it.

#1 & #2 are the fundamental choices. Both will give income and capital appreciation, if you're lucky. With equities, that's the whole story. With property bought for cash and rented out, that's it too.

But if you can't afford to buy it cash, and can't buy it a piece at a time, you borrow to buy it. then, largely speaking, you are giving up the income to maintain the loan, in return for which you get all of the capital growth from the start.

But the capital growth in equities comes, in principle, from real economic growth of the companies you invest in. The capital growth in property comes from this asset class having higher inflation, induced by shortages. No real growth is happening. In fact you hope that it doesn't, because you are invested in shortages, that's what you're hoping to profit from. If you did that in penicillin or cup final tickets, you'd be called nasty names!

[AtW]

If there was Sharia law in the UK then this house pricing bubble would not have happened

[tim123]

If there was Sharia law in the UK then this house pricing bubble would not have happened

Really?

Prices have apparently sky rocked in downton Bagdad.

tim

[AtW]

That's because after the liberation free people of Iraq started valueing ecology, so value of houses in the Green Zone is especially high.