From: "Andy Pandy" 
Newsgroups: uk.politics.misc alt.politics.british uk.finance
Subject: Re: King sounds warning over economy. House prices overvalued and bankrupcies risk becoming large social problem.
Date: Thu, 11 May 2006 08:53:55 +0100


"tim (back at home)"  wrote in message
news:4cf55uF15kvb2U2@individual.net...
> > Buying makes no sense if you are only going to live there for a short time
> > frame.
>
> The classic way to get to the house that you want is to
> trade up every 2-3 years.
>
> It's suprising the number of houses which are bought
> by buyers that live in them for less than 2 years
> (including both my first and third purchase).
>
> I think that the average between moves is seven, but
> that must be increased by the people (like my dad) who
> own the same house for over 50 years.
>
> It use to be the done thing, now I would suggest that
> it is not sensible, but there would still seem to be people
> doing it.

It was never sensible financially, except for those periods during which house price
inflation was unusually high (and you'd have needed your crystal ball to predict
these periods).

Historically house price inflation has averaged about the same as mortgage rates, so
by trading up every few years you are simply giving your mortgage company all the
increase in equity.  Add in the higher costs of owning the bigger house, and you are
losing.  Add in the buying/selling costs, which will be very significant of you
buy/sell every 2-3 years, and you are losing big time.

Usually the quickest way to get the house you want is to pay as little as possible in
mortgage for as long as possible and save.

--
Andy