| With house prices in decline now for a third | | | | retirement. Even the small number of people paying |
| consecutive month (as at 1st February 2008) and with | | | | their maximum contributions are likely to see dramatic |
| some economists predicting further decline in the | | | | reductions in income post retirement and who would |
| coming months one must ask the question whether | | | | want to continue to pay rent during these years when |
| home ownership is likely to be a good investment. | | | | a mortgage could have been paid off already? Not I! |
| Although slowing growth often goes hand in hand with | | | | I often wonder whether pro-renting countries would |
| lower inflation, it seems that the latest surveys on | | | | have the same outlook if they were subjected to the |
| consumer confidence indicate that inflation may be set | | | | appalling traffic conditions, ever-tightening school |
| to increase over the coming months. This makes the | | | | catchment areas and poor pension projections that |
| Monetary Policy Committee's job of adjusting interest | | | | we currently 'enjoy' in the UK. |
| rates to balance the economy more tricky and many | | | | Looking at the demographics, the number of people |
| economists now seem uncertain as to whether rates | | | | wanting to buy new homes is still exceeding the |
| are likely to fall as dramatically as previously predicted. | | | | number of homes being built and this trend is likely to |
| Lower interest rates which naturally ease borrowing | | | | continue whilst land available for building remains in |
| criteria are an obvious benefit to all but none more so | | | | short supply. The laws of supply and demand should |
| than the First Time Buyer. A very large percentage of | | | | generally therefore ensure that prices remain buoyant |
| house chains are closed thanks to the First Time | | | | in the medium to long term. |
| Buyer and the market would suffer greatly should | | | | There are also ways of safeguarding yourself against |
| higher interest rates, tough borrowing criteria and | | | | the financial consequences of fluctuating market |
| uncertain house-price conditions prevail. | | | | forces. Certainly a fixed rate mortgage can guarantee |
| Despite this slightly gloomy outlook I have to say that I | | | | your payments for a chosen period of time and |
| still feel home ownership is the way to go for the vast | | | | insurance can offer protection against the financial |
| majority of people. Firstly, everybody needs a place to | | | | consequences of poor health or unemployment. |
| live and the only alternative to buying your home is to | | | | We all know that journalists create headlines which sell |
| rent. | | | | papers but its worth remembering that despite January |
| Although popular in some countries, I have personally | | | | being the 3rd month of consecutive decline is was only |
| never liked the idea of renting as a long-term | | | | actually 0.1% (according to Nationwide Building Society) |
| proposition. When choosing a home to buy the location | | | | which is frankly a number almost too small to be |
| is as, if not more important than the property itself and | | | | hugely reliable and as a National statistic tells us nothing |
| the uncertainty with renting could mean that an ideally | | | | about individual areas. Lets also keep in mind that the |
| positioned home now is not available in 6 months time | | | | annual rate of property-price growth is still 4.2% a |
| if the landlord chooses not to renew your agreement. | | | | figure which is well above the average price of |
| Secondly, the majority of UK citizens are falling short | | | | inflation. |
| of making anything like adequate provision for their | | | | |