The Best Investment Most Of Us Will Ever Make
Where would dinner parties be without the subject of house prices to lubricate the conversation? As a nation we are in thrall to the housing market, and owning our own home remains one of the most widely held aspirations across a huge swathe of the population.
It is easy to believe that this is because owning a home has, at times, seemed like a way to make ‘easy money’. The latest figures show that between 2009 and 2018 average house prices rose by around £100,000 (albeit that this period did start during the deepest and longest recession since the war).
If you own a home and have no intention of moving, that rise is good news – the value of your mortgage debt in relation to that of your home will become steadily smaller, meaning you own a greater proportion of the equity. On the other hand, if you are renting, rising house prices could mean that the moment you can get your foot on the property owning ladder gets further away.
Either way, what The Guardian last week called our ‘national obsession’ with house prices all seems rather irrelevant when you consider that a property should first and foremost be a home, rather than a financial instrument. Owning a property shouldn’t be about accumulating wealth, but about providing your family with a secure home which they can enjoy with all the comforts and conveniences of modern living: energy efficiency, super fast fibre broadband, open plan living and A-rated appliances, to name a few.
However, few of us will be able to afford the perfect family home as a first-time buyer, and the ability to trade up as family circumstances change is important, and is only really possible if prices are moving upwards.
We know from families who are on their second or even third Abel Home that this is how the market should work in a perfect world. As children come along, a steadily rising market allows families to move up to homes which can accommodate their growing brood, and this in turn creates a supply of smaller homes at the entry level in the market.
Also, we shouldn’t forget that that sustainably rising market provides the opportunity for older ‘empty-nesters’ to downsize, release some of that equity, and help the next generation get their own home. We see this happening a great deal, and it is an important by-product of a market in which prices are edging upwards.
Buying a house shouldn’t just be a financial investment. But buying a home remains the best investment – financial and social – that most of us will ever make, and even if the market has its wobbles, that is as true today as it has ever been. Which is why the housing market will continue to be the subject of many a dinner party conversation.