Last night's "Property Ladder": A Question

"Anthony James" wrote | Look at the advice on the website: | "Don't Nest - Invest! | These days, millions of people own their own homes, but why are | they nesting when they could be investing? An upsurge in the | real estate market has born witness to the fact that there | is some serious money to be made. Consider this examples; | a colleague of ours who bought a two bedroom garden flat | in Fulham some two years back for 190K and sold it recently | for well in excess of 300K. Quite. And the work required to | see this upturn? Hold on to your seats guys, because here | comes the answer; NOTHING! The property market did all the | hard work. Wow!" | That's not property development ladies. Fulham is hardly an | up and coming area - it's been expensive for years and hasnt | increased relative to the places around it. All that does | is say houses are more expensive than they were.
And that, therefore, is not in property terms return on investment. You start with a 2 bed flat and at the end of it you still have a 2 bed flat. If you sell that 2 bed flat all you are going to be able to afford to buy is another 2 bed flat. Regardless of the the property has not increased in value relative to other property. It's not investment, it's inflation.
The only way to make money out of a property is to do it up so that, less costs fees and taxes, it rises faster than the market.
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