House = Money?

Just had an interesting conversation on the phone with my girlfriend. She rung me to advise me that when she secures a job with a Design company (She is currently studying Theatre Design) she was thinking of saving frantically and then purchasing a house in the north of England. The idea behind this is to then rent the house out to students or professionals to make some extra money on the side. I think its a great idea, but it does seem a little too easy. I tried to usurp her position by presenting her with council tax, water rates and the many costs from building problems, but her lovable optimism shone through and she would not be disheartened. I shouldn't worry so much really, shes really intelligent, knows what she wants and is really good to me, I know she will make it work out.

So it seems the long term plan is to invest in a house in the north, then when I finish the law degree, and hopefully get a training contract we can invest in our own house. Sounds like a good plan. However it involves playing the waiting game. Following the many headlines about housing prices, I personally anticipate in the next 5yrs the prices will drop. Its surely inevitable as housing prices have risen 204% compared to wage increases of only 94% over (Source: www.bbc.co.uk). So we will wait in anticipation of this drop. I don't think they will drop dramatically like in 1979, but they will have to come down slightly.

The probability of this is encouraged by the housing graph on the http://www.housepricecrash.co.uk/ website, notice how it rises and falls religiously each set amount of years. Maybe this period will be different but there is no harm in hoping


So today I am a good mood, amongst the other things in my life I have to look forward too, I can add this one to my list. Ironically it will probably turn out to be a nightmare in the end.