The Uks’ desire to own ones’ own property is a major driver behind the country’s economy , of that there is no doubt. Property generally accounts for an extraordinary large amount of the country’s wealth and the industries that it spawns off account for a large proportion of the country’s economy. It seems only reasonable that We Buy Houses as more than just dwellings, usually taking into account that We Buy Homes with an eye to a future improvement in the property price. But is it therefore totally natural that we should be quite so heavily invested in the UK housing market on a personal level?

Well I shall play devils advocate here and say “Actually , no it isn’t”. Heresy, I hear you cry but please hear me out.

I am very substantially invested in the property market in the UK. Well if you call two flats , a cottage , all rented out, and a modern house which I actually live in , heavily invested then that’s me. All of the properties have loans against them and presently all but the one I live in are let out. Aside from a tiny pension fund the whole lot represents my entire capital within the UK at the moment and, unless I win a massive sum on the premium bonds, (an unlikely event as rates have gone down and I don’t have so many bonds) , then that’s probably all I will have to rely on for my retirement. The situation I envisaged was that I would Sell My House as I neared retirement and downgrade thus releasing some equity from my residential home, and then continue to have income from the rental properties

It sounds like a brilliant plan doesn’t it? But in a real situation it has a possibly fatal flaw. I am hopelessly over exposed to the current state of the housing market at any time. If there is a massive housing price fall then all my capital and equity in the rented properties could be wiped out forcing me to Sell My House in order to finance the rented out properties, if there are sizeable periods when they are not tenanted. A hike in interest rates could finish me off altogether . If I had invested in a diverse number of products then I would be in a position to rent accommodation of my choice secure in the knowledge that all my eggs are not in one basket and that if one sector take a nose dive, another may well come good thus ensuring long term profit.

It has been a bit traditional that when We Buy Houses in the UK , we expect them to be proper investments that will increase in value in the medium term and even produce pretty spectacular gains all leveraged by finance , usually in the form of a mortgage from a bank or building society. But when We Buy Homes with finance it’s almost always a given that we take a short term view of the finance rates – and this is encouraged by overly generous discounts or fixed rates from apparently caring financial institutions who claim to have our well being at heart.

Rarely do we give a thought to the downside in that we have invested all the capital we have into a market that we are unable to control and have leveraged the purchase with cash from institutions that , in contrast to their smiling friendly TV advertising, have hearts as black as pitchcoal and senior managers that would boil down their own aunties if they thought they could sell them in jars at a profit.

No there must be a better way, a different way. Given my time over I certainly would not have invested all my available money into high value items that are difficult to shift on the down times. I would have disconnected my needs for housing from my investments strategies and maybe had a small investment in a single rental unit and put the rest into stocks, bonds, gold, commodities, well whatever the smart money was doing at the time.

And I would have rented a property instead of buying one as when the bad times came , I would have been able to up sticks and move at will and save my cash .

But that’s just playing the devils’ advocate here. Or is it?