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A House is STILL the Best Investment - Even in 2008

Apr 21, 2008
In todays economic situation buying a home will be the largest and best investment most people will ever make. Lots of people correctly believe that owning their own home will create a nest egg and is something to be proud of at the same time. On this side of the Atlantic it does seem largely a British dream as opposed to Germany and France where the people are quite happy to rent a house all their lives. In the current financial climate some people are starting to wonder if this premise will hold true but check out few facts here and you'll see this is a constant financial fact.

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.

Of course there are some lean times periodically when property prices take a temporary downturn due to other economic factors. It's unfortunate if you're just starting out when this occurs and it could be a struggle. If you're established in your home when this happens then just sit tight and wait for it to end. It Will!

Here's another example of how the property market is the best and most consistent investment over time. Let's say a semi detached house was worth 80,000 in 1997. The value of that house today would be in the region of 150,000. Your investment in that house could have been as little as 4,000. If yu had invested that 4,000 in the stock market in 1997 you would now be worth around 7,800. Where would you rather have had your money?

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.

As the property owner goes through life and their careers they can upgrade their property at the right time and this can mean their investments can be Tax Free. Profits form a house sale ploughed into a larger house purchase are very ofetn not liable ofr Capital Gains Tax which is a really BIG bonus!

Currently there is quite a bit of Doom and Gloom around. If you are purchasing during this period probably some really good bargains can be had as some people who were possibly a little imprudent may have to sell their property to clear some debts. Don't be put off by all the bad news around at the moment, this is yet another in a long line of property price blips and those who have no real need to move can just sit tight and the market will recover as sure as the tide will come in. What's important is to get the mortgage that is right for you. There are different types of mortgages out there and it's important to get the best advice on what is the best mortgage for your particular circumstances.

Lots more people are now considering debt consolidation mortgages to help straighten out their finances as the current mini-recession takes hold. Significant savings can be made by consolidating higher interest debts in this way and it will be easier to sit tight and wait for the property market to recover.
About the Author
CheapestLoansByFar.com is the UK's premier source of the best lowest interest loans available. They are fully independent so will scour the whole market. Click the link for Debt Consolidation Mortgages available in the UK.
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