For the vast majority of people buying a property for a home will be the biggest financial decision they will ever make, and also the best one. It does seem to be more of a "British" thing than a European one though as a far higher percentage of Europeans are happy to rent their homes and don't see owning a property to be as important as the British do. Sometimes in periodic downturns in the market some people start to wonder if this concept is flawed but just by looking at a few facts we can easily prove that this is not the case.
The Property Market has consistently shown appreciation over the years. Real estate has generally appreciated about 5% a year overall. Having 5% down on a 200,000 house is an investment of 10,000. That house would increase about 10,000 to 11,000 for the first year in normal growth years. Earning 10,000 on an investment of 10,000 is equivalent to 100% earnings which would be virtually impossible to do in the stock market unless you were extremely lucky.
If you put 5,000 into the stock market and got a 5% gain, you would receive a 250 profit. Clearly, the property market lets you come out much further ahead in average years. It must be stressed that we do have some exceptional years where the value of your property could possibly go up by even a 1/3rd! but this is exceptional.
There are also some lean times in the property market. Your property could possibly go down in value in the short term even if the overall trend over a period of time will ALWAYS be up.
If you look at it over a longer period of time, say you put 5,000 into the stock market in 1996 and the average S & P return would make that investment worth about 11,700 today which is an increase of 6,700. The average house price in 1996 was 70,000 and today that same house would have gained 50,000 in value if not more. The real estate market consistently shows itself to be a substantial investment method to riches.
The beauty of the property market is that home values tend to increase more or less steadily over the period of time. There are spikes and troughs but these are nowhere near as dramatic as those when you are dealing with stocks and shares. It is a true fact that the housing market has NEVER yet failed to recover from a slump in prices. The British attitude to owning property will always ensure that this remains constant.
By cleverly buying up over the years people can also legitimately avoid Capital Gains Tax which in effect makes the earnings from their property investment tax free!
There is no reason to fear home ownership in the market in the current market with all the doom and gloom around. Simply look for the type of property and payment mechanism that you can afford and resist the temptation to use your home for a "bank" when you need money as in an equity line of credit. The home will be by far your best asset in your future financial portfolio and will continue to make you feel secure in your financial future for the rest of your life. Everybody's circumstances are different and a really important task is to make sure you are in the best mortgage for you! There are lots of different mortgage options out there and it can make a massive difference to your lif if the get the best advice for you.
As the economy takes a bit of a slump if you find your finances are getting a bit difficult to handle then a good option is to consider a debt consolidation mortgage. Your monthly outgoings can be significantly reduced by taking this option as opposed to paying other high interest loans and credit card balances.
The Property Market has consistently shown appreciation over the years. Real estate has generally appreciated about 5% a year overall. Having 5% down on a 200,000 house is an investment of 10,000. That house would increase about 10,000 to 11,000 for the first year in normal growth years. Earning 10,000 on an investment of 10,000 is equivalent to 100% earnings which would be virtually impossible to do in the stock market unless you were extremely lucky.
If you put 5,000 into the stock market and got a 5% gain, you would receive a 250 profit. Clearly, the property market lets you come out much further ahead in average years. It must be stressed that we do have some exceptional years where the value of your property could possibly go up by even a 1/3rd! but this is exceptional.
There are also some lean times in the property market. Your property could possibly go down in value in the short term even if the overall trend over a period of time will ALWAYS be up.
If you look at it over a longer period of time, say you put 5,000 into the stock market in 1996 and the average S & P return would make that investment worth about 11,700 today which is an increase of 6,700. The average house price in 1996 was 70,000 and today that same house would have gained 50,000 in value if not more. The real estate market consistently shows itself to be a substantial investment method to riches.
The beauty of the property market is that home values tend to increase more or less steadily over the period of time. There are spikes and troughs but these are nowhere near as dramatic as those when you are dealing with stocks and shares. It is a true fact that the housing market has NEVER yet failed to recover from a slump in prices. The British attitude to owning property will always ensure that this remains constant.
By cleverly buying up over the years people can also legitimately avoid Capital Gains Tax which in effect makes the earnings from their property investment tax free!
There is no reason to fear home ownership in the market in the current market with all the doom and gloom around. Simply look for the type of property and payment mechanism that you can afford and resist the temptation to use your home for a "bank" when you need money as in an equity line of credit. The home will be by far your best asset in your future financial portfolio and will continue to make you feel secure in your financial future for the rest of your life. Everybody's circumstances are different and a really important task is to make sure you are in the best mortgage for you! There are lots of different mortgage options out there and it can make a massive difference to your lif if the get the best advice for you.
As the economy takes a bit of a slump if you find your finances are getting a bit difficult to handle then a good option is to consider a debt consolidation mortgage. Your monthly outgoings can be significantly reduced by taking this option as opposed to paying other high interest loans and credit card balances.
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