Sunday, Dec 30, 2007
Cash is King
Mail: Cash overtakes property as prices fall
House price growth in 2007 will drop below 5% after more falls in December, according to the latest figures from the UK's largest building society. The fact house price rises in 2007 fell below 5% will be of particular interest to those with investment and retirement funds tied up in residential property. It means that cash savings accounts, with no risk of losing money, represent a better return on invested capital.
They must have forgot all about the Rock crisis in stating "with no risk of losing money" - strange really when it is being propped up by approximtely £100bn worth of guarantees !
Posted by jack c @ 12:01 PM (700 views) Add Comment
3 Comments
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1. stillthinking said...
So for all the talk of prices stagnating in 2008, turns out that they stagnated in 2007, given that 4.8% is a realistic inflation figure.
2. Jayk said...
"So for all the talk of prices stagnating in 2008, turns out that they stagnated in 2007, given that 4.8% is a realistic inflation figure."
Good point. But who cares about retail inflation in this context? Pay inflation is the relevant index, and even if that was on a par with 4.8% it still is far behind in real terms.
An average UK worker receiving a 4.8% pay award (lucky him) gets another 1,200 pa. An average UK home increasing by 4.8% adds around 8,000. Even if you multiply the increase in pay by 3.5 (a standard mortgage multiple) you only get another 4,200 in loan value. You still have to find another 3,800, settle for a higher loan rate and no doubt pay a higher reservation fee. Then buy a HIP..........
3. Debtfree said...
CASH IS KING
Please define what is cash......