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