Star comment: Rising house prices are not good news for all

Every week brings a new story about record house prices. On the face of it, the increases are good news. Property owners are sharing in the nation’s wealth as the value of their assets increases.

There is a flipside, however, and for first-time buyers the nightmare continues. The cost of getting on the housing ladder is simply beyond many and the provision of housing that was once within the ambit of local authorities is largely gone. Those in need of property now have to turn to private landlords, whose principal interest will be profit rather than providing the best quality housing.

We are in uncertain times and people with mortgages are justly concerned that a hike in interest rates to quell inflation will take them into debt. Household budgets frequently have little margin for error and paying extra money on the mortgage means cutbacks elsewhere or the simple inability to pay. For those in the rented sector, landlords continue to increase rents to new record levels.

Many people will have seen the housing market ‘pop’ on previous occasions, with an attendant fall in values. We have been in the situation before of families losing homes because they cannot afford repayments. We may be heading in that direction again. A bear market normally leads to a crash.

We must hope house prices do not suffer a collapse, but the warning signs are there. It happened in 1989 and 2008. It would be wrong to dismiss the potential for house prices to fall, taking people into negative equity. The golden rule is to invest in housing with your eyes open and finances capable of dealing with every eventuality.

We live in uncertain times. The Covid pandemic brought a period of unimaginable change and it will take some years to make a full recovery. As we emerge from that economic and emotional trauma, we are also witnessing the horrific scenes of Putin’s war in Ukraine, which is causing bloodshed and economic damage.

Against that backdrop, and the challenges of funding the NHS and social care, the nation must also confront its domestic agenda. In the case of individuals, that means planning early for retirement - and that means at the age of 20, rather than the age of 50.

With cost of living going up and the effectiveness of pension schemes not keeping up, it is essential that people get advice on how to invest their money. Taking expert advice and putting money away each week is the only surefire way to provide personal protection in retirement.