I woke up to Sky news this morning and one of their headlines was “Millions Face Negative Equity” with the sub headline, “Up to 1.2 million homeowners in Britain could soon fall into negative equity if house prices continue to fall steeply, a report has warned.
This report is from the Bank of England and is called the “Bank of England’s Financial Stability Report”.
Sky News and other media sources love to spoil our mornings don’t they? They take the bones of a report such as the one above and create a big headline and story, then profess it to be actual, just to get us to “stay tuned” or get us to buy the newspaper.
Well I’ve been saying it for quite a while that yes there does have to be a correction in the market, but if you take the 15% already taken off the value of houses, plus the forecast of 15% that the “experts” warn us will occur in the next year, then you have a loss of 30% in three years. REALLY!!
There are so many experts out there, whose job it is to contribute an a daily or weekly basis to the media or they wont get paid. If there is any good news it just gets buried.
Good news is not good for newspapers, it doesn’t sell as well as bad news. There have been many attempts to start a “good news” newspaper but they just do not get off the ground, because fundamentally, we like to read bad news. Why, don’t know, I’m not a psychologist, nor do I play one on TV.
So when I read those headlines, I take them with a pinch of salt, yes its tough out there and the value of houses will remain staticfor a year or two, but after that they will go up…its a monetry cycle folks.
People still have to buy houses to live in, not to necessary profit from in a big way, leave that to the buy to let investment boys and girls.
Buying a house is still one of the safest investments long term. And if you buy one with a conventional mortgage, you will pay back what you owe and end up with a great investment at the end.
Do yourself a favour, stop watching 24hr news…
Take care.
If you want straight talking mortgage advice, call me up, I’m here in the office 9-5 at least.
Michael
mums