Cars and houses

[simonali]

Perhaps the neighbour's car is a company car?

I would imagine you'd have a pretty good job to get a 50 odd grand company car and would have a nicer house as a result?

The owner of the house across the road from the one mentioned had an M6 up until recently and they're over £80K!

Maybe everyone in that street works for a BMW dealership?

 

[wafflycat]

Cost of leasing... to Joe Public about £600pm - £700pm... Makes sense tax-wise for a company.

 

[Ben]

Despite its overall image of environmental consciousness I think this is pretty common in Germany. I had a girlfriend there who, when I first met her, lived with her Mum, Dad and sister in a pretty modest apartment.

Her dad (foreman in a car factory spray paint shop - but NOT Mercedes) drove a brand new Merc, her Mum had a new Fiesta and the two girls had her recent hand-me-down Fiestas - the oldest was no more than four years old. So four people - four cars - in a pretty big town - and all their neighbours seemed to be driving new or fairly new Mercs, Audis, BMWs or VWs.

Overall I felt the Germans invested more ego in their cars than their homes (which are often rented though my girlfriend's parents wasn't). But perhaps we invest too much ego in our houses - let's face it the amount of property pornography we have here is obscene - so spending so much on cars is perhaps only a variation of being obsessed with house prices.

 

[simonali]

I guess it might be down to more of us owning our homes, too and seeing them as a sort of investment. Houses go up in value, cars don't, but if you rent your home that fact is of no consequence.

 

[simoncc]

I know plenty of people who don't own a house at all but own a car - many of my younger freinds and acquaintances for example, and council estates are full of such people.

Most people I know buy cars before they've even finished paying for their house! Would you believe it?

 

[Smokin Joe]

I guess it might be down to more of us owning our homes, too and seeing them as a sort of investment. Houses go up in value, cars don't, but if you rent your home that fact is of no consequence.

A debatable point, though you are technically correct.

If houses double in value then the price difference between yours and the next price band will also double, which leaves many people stuck in a property their needs have outgrown because moving is too expensive, so it is actually the cost of housing which goes up in practical terms.

You only win from increased house prices if you downgrade, which most people don't want to do. House values are a false indicator of wealth, we would all be considerably better off in the long term if prices crashed and never recovered.

 

[simonali]

The house I referred to in the OP is a 4 bed detached (I'd guess by the size) and so is mine. They are a 2 minute walk apart, but around £100K (market value) difference in price. LocationX3 and all that. My mortgage is less than £100K, so I could move a street or 2 away, be mortgage-free and still living in the same sort of house. I could probably then afford that high end BMW, BUT...

in a few years that BMW will be worth not a lot, whereas the difference between the 2 houses might be £150K. I couldn't save that sort of money (£50K) in that amount of time, so I'd rather have the house than the car. As you say, the increase is immaterial if you don't cash in on that increased value, but it's nice to know you have something to fall back on if it was needed.

 

[Blue]

You only win from increased house prices if you downgrade, which most people don't want to do

A lot of people do downsize when they retire. This has a number of advantages like releasing funds and reducing the effort of upkeep when you are less able.