Britain stuck with high inflation, meagre growth..

[VectraMan]

Not unless they have invested that debt into something, like a house for example.

WHS. I have no debt, but I've never bought a house either. Anyone with a £100K mortgage on a £200K house is better off than me.

We should look at it like corporation tax, i.e. assets vs debts. If your assets outweight your debts, you have no problem. It's borrowing money to go on holiday/buy clothes/buy petrol/pay interest on other loans that is the problem.

[Mich the Tester]

Not due to the government policies which i am talking about.

Oh, so you know for sure what's going to happen with house prices?

Anyway, the person who's bought an asset tat may rise or fall in value, and paid for it without a loan is still better off than the one with the loan. Using your example of a house, if it rises in value he's got the gains without the loan to repay, if it falls in value, he's got a house and can live in it without fear of how to repay the loan. Ergo, man with savings better off than man with loan.

[Robinho]

Oh, so you know for sure what's going to happen with house prices?

Anyway, the person who's bought an asset tat may rise or fall in value, and paid for it without a loan is still better off than the one with the loan. Using your example of a house, if it rises in value he's got the gains without the loan to repay, if it falls in value, he's got a house and can live in it without fear of how to repay the loan. Ergo, man with savings better off than man with loan.

For as long as the government is printing money at the rate it is then house prices will rise.

If the government reverses policy then it will no longer be making it stupid not to take out debt. As of now it is though, and they don't show any sign of changing course, let alone even understanding the folly of their policies.

[EternalOptimist]

Not unless they have invested that debt into something, like a house for example.

buy a house with debt and you pay £300,000 for a £200,000 house
buy the house with cash and you pay £200,000 for a £200,000 house

[DimPrawn]

The sensible (but I admit risky) thing to do is to have the biggest mortgage you can get whilst still being able to borrow at the lowest rates.

Then the spare cash you have should go into tangible assets, so perhaps another UK property (BTL) and perhaps a foreign property (holiday let), buy gold on the dips, classic cars, some art, stamps, antiques etc. Also some dividend paying stocks like utilities as inflation will boost their price and profits.

The future involves increasing debt for the west, money printing and debasement of our currency. In these situations use the cheap debt to buy physical assets.

This is why the super rich are paying £300m for a house in London without even blinking.

BBC News - London's most expensive house yet, at £300m?

[Mich the Tester]

For as long as the government is printing money at the rate it is then house prices will rise.

If the government reverses policy then it will no longer be making it stupid not to take out debt. As of now it is though, and they don't show any sign of changing course, let alone even understanding the folly of their policies.

Euroland is doing something similar by propping up banks. Euroland house prices are falling. US is doing quantitative easing; US house prices are rising by about 1.5% , which is probably an accurate reflection of US GDP growth right now.

This is the point; you think you know what will happen to house prices, but you don't. The logic says that QE will lead to higher property prices, but the logic we all thought we could trust has been proven very fallible in the last few years. The reality is we don't know what house prices will do. There are good reasons to think they'll grow somewhat in London whether the economy does well or not; if the economy goes well, people in London might spend more on houses. If it goes badly, lots of people might move to London looking for work or business opportunities, so demand for houses in some price ranges might rise.

BUT; the baby boomers are retiring and they don't need their houses in London any more. Many might prefer to trade down to a smaller, more manageable house so they can enjoy blowing their easily earned pensions at Oddbins. Money spent on chardonnay is money not spent on houses.

In other words, to have any confidence in the prediction that house prices will rise, you have to know what people's spending patterns are going to be, and there are simply too many uncertainties for you to know that. I've only named a couple of uncertainties and there are many more.

[Robinho]

buy a house with debt and you pay £300,000 for a £200,000 house
buy the house with cash and you pay £200,000 for a £200,000 house

Or you could add that 200k to a 300k mortgate, buy a 400k house. Pay off that 300k which will get easier and easier when inflation hits 10%. And end up with a house worth a lot more than 400k.

[Mich the Tester]

Or you could add that 200k to a 300k mortgate, buy a 400k house. Pay off that 300k which will get easier and easier when inflation hits 10%. And end up with a house worth a lot more than 400k.

And a profit that's not worth much.

[DimPrawn]

Or you could add that 200k to a 300k mortgate, buy a 400k house. Pay off that 300k which will get easier and easier when inflation hits 10%. And end up with a house worth a lot more than 400k.

Yep, as long as you leverage the debt to be able to buy more physical assets you are a winner.

The idiots are the one that choose the big debt and then blow the money they have on crap, like rubbish Toyota cars and sheds that depreciate. They are known as Cretins.

[sasguru]

If the government reverses policy then it will no longer be making it stupid not to take out debt...

So logically, I take it, as you consider yourself not to be stupid, that you're up to your neck in debt?



You cretins make me split my sides laughing, you're just too stupid for words.
Like idiot savants, without the savant bit.