About people benefitting from property price rises?

[boschy]

I have been thinking - on the back of the benefits cap thread, so please forgive if this is not the done thing!

To me, it seems that there is a difference between property speculation - ie buying cheap properties, doing a quick job and selling them on or renting them out at as high a rate as possible in order to rake in the dosh - and DIY?

I'll explain - we are on our 3rd property. Bought a flat cheap, sold it 7 years later for 3 times the purchase price. Bought a house cheap, sold it 8 years later for 3 times the purchase price. (Both times I had a dream that the eventual price we got would be that amount iyswim!) Location - S London - and the times - the 90s - undoubtedly helped in both those cases.

HOWEVER in all three cases, we lived in conditions that I think many would find unacceptable - total rewire, reroofing, replastering, new kitchen/bathroom, damp, no floorboards downstairs in the 2nd house for 3 years, building dust and dirt and debris etc etc. We did all the work ourselves, or knew people who would help out with mates rates when we really couldnt do the work. Both the first 2 properties were finished just a couple of months before we sold. Been in the current house 13 years, brought up 2 DC in 'challenging' conditions - our house now is still a major challenge and years to go before it is what most would call 'acceptable', let alone what estate agents would call 'desirable'.

So we have benefitted along the way from rising property markets - but also from sheer bloody hard work. When we sell this house - should we profit from the effort we have put in, and the market changes as well? if not, why not? and if just from the effort, how would you quantify that? and who would be the arbitrator?

Just to add, the only property purchase with the hope of making money was the one that made zero. The first was a home to save on exorbitant London rents and the third was bought as our family home - it is far from grand - and broadly I would agree that its escalation in value has been incredible but I will balance that by saying that we took a huge risk when we bought it and lived through a few years of bulldozers and building noise before it emerged.

this is what £3.2M buys in Putney.....

www.rightmove.co.uk/house-prices/detailMatching.html?prop=36572663&sale=43252661&country=england

nice shell, but overdeveloped.

yeah i wouldnt take it off their hands unless they paid me

I don't like it either and ours isn't that modern or that grand

I'm with SinisterBuggyMonth on this and I expect that opposing views on the subject will largely reflect an age divide/generational gap.
When you can have two people in a couple working full time in this country but who can't even afford to RENT a property never mind buy one as well as pay bills and eat, something is very wrong with both wages and property prices.

oh maam certainly it was just the first one i found

I agree mixed berries but that is not the fault of those who bought years ago It is the govt. FWIW when we first bought we had 2 salaries and we were skint for years No holidays or car etc.

Quite, noddyholder, not saying it's the fault of the buyers but I do think that they should sometimes appreciate that they were just lucky once upon a time. Of course they worked hard for it, and well done for that, but many many others work just as hard, if not harder, and have absolutely nothing to show for it.

Yep, we know all about skint here too. It isn't the fault of those who have benefitted (though why you couldn't all altruistically sell your houses for their original value just to help someone out I don't know but that doesn't mean it won't grate on some of those coming after. And implying that it was solely down to hard work, good choices, risk taking etc is a little galling as it implies those who won't be making the big bucks in the future (or even managing to buy at all) are failing on those counts. When most are almost taking bigger risks due to the salary multiples etc, and are prepared to work just as hard. Acknowledging that it is a tough break for many would prob help.

As a 25 year old who is not doing badly for myself but probs won't be able to buy until I am 40, I think the question here about unearned income is missing the epoint.

I have just paid for a holiday for DP and I, and I feel I have earned it. However, if in 20 years time someone says that we didn't earn it as the cost then is relativly 3X higher (as no more planes have been built) that won't be accurate. However, it would be accurate to point out that I didn't have to work nearly as hard to buy that holiday as I would have done in the future, due to the good fortune of when I was born!

Or what MixedBerries said in half the words!

Oh! My first .

I also agree that the suggestion that people who have made their money thorugh risk taking, hard work and saving is galling.

I find it quite offensive, though I know it is not intended as it, as it suggests that as I am not on the property ladder I have lacked these 'qualities'. When In fact I have been working straight out of uni, been saving as best I can and working in extremely hard jobs with long hours in a risk takign industry. I just havn't had the chance to do any of these things on the property market!

No, but if you could sell your holiday in the future for 3x its value you could prob expect the generation who couldn't afford to buy it to be a little if you tried to tell them its cause they're not prepared to work hard enough for it!

Wasn't meant like that at all Ninky. We didn't do it on purpose and the only property I bought with the intention of making a profit was bought near the top of the market which then plummetted. Property prices come and go and I do accept that we were incredibly lucky, a lot of people thought we were incredibly stupid at the time. I acknowledge wholeheartedly that younger people are having a tough time but you know it wasn't all roses back in 1981 which had the highest graduate unemployment yet seen, interest rates were spiralling upwards in the 80's (I can remember 15%) and on the heels of the 79-82 recession came the 89-93/4ish recession. We bought at the bottom of the market then and it was rock, rock bottom.

Not at all Married, I wasn't thinking of you when I wrote (though I am joining Tilly in awe!), it was some earlier posts I had in mind. We have it comparitively easy at the moment in the respect that we have low interest rates, so thank heaven for small mercies eh! That'll have to change one day though, and god help some people then...

genuflects to Tilly and Ninky et al for not being flamed over thoughtless post. Feels a part of mnet. Tries never to be unkind. Is very down to earth in rl.

@Niny I agree that's not fair. But that's not what I meant as shown in second post:

"I also agree that the suggestion that people who have made their money thorugh risk taking, hard work and saving is galling.

I find it quite offensive, though I know it is not intended as it, as it suggests that as I am not on the property ladder I have lacked these 'qualities'. When In fact I have been working straight out of uni, been saving as best I can and working in extremely hard jobs with long hours in a risk takign industry. I just havn't had the chance to do any of these things on the property market!"

Plus people didn't buy knowing thta would happen. It's lady luck (facilitated by successive govs)

I think the govt allowed rises to run away with themselves as it made house owners 'feel' wealthy and kept them spending. This made the economy look buoyant This was maintained with low rates and silly multiples. Years ago houses rose with inflation more or less and a particularly nice one in any given road may be a couple of thousand more if that. There was a lot of equity release going on to and this fuelled car sales and in some cases private school fees and second homes. It was like a cash point for some

I know Tardis, I cross posted with you!