Managing my money
Managing my money

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Managing my money

Week 6: Housing and the household balance sheet


Property as a home and as an investment. Buying a property – mortgage products. What are the total costs of buying? How do you repay your mortgage? Freehold and leasehold properties – what’s the difference?

More so than in many other countries, the health of the UK property market is of pivotal importance to the health of the overall economy. This week you’ll be exploring how the UK property market and the associated market in mortgages work. You’ll see how both housing and mortgages fit into the household balance sheet and you’ll complete this as part of your fact find. You’ll also get a link to a mortgage calculator to enable you to look into the cost of a mortgage.

Download this video clip.Video player: ou_futurelearn_money_vid_1016.mp4
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Martin Upton
The UK property market is rarely out of the news, whether it's stories about the booming London market or plans to build a garden city.
In the UK, around 65 per cent of households are owner-occupiers - they either bought or are buying their home. With the marked up trend in house prices in recent years, the value of property is now much higher than it was at the start of the 1990s. For most, their property is primarily a home rather than an investment. But even as a home, it's likely to be the biggest asset. However, some people own properties for investment purposes only. These are buy-to-let properties.
Examining housing brings us back to the subject of debt studied in Week 4 - this time the focus is on mortgages. These are used by most households and make up the largest category of personal borrowing in the UK. Mortgage terms typically extend to 25 years, so they're a debt product we live with for a long time. It's very important that we understand how mortgages work.
In recent years mortgage rates have been at historic lows, and whilst this has been good news for people buying property, it creates concerns about what happens when interest rates start to rise again.
As you work through this week, you'll complete a further financial tool - the household balance sheet. This tool will help you understand your financial position and help to highlight how you may need to make your finances more robust in the face of life's events and external changes.
Enjoy Week 6 and I'll see you again next week.
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This course is presented with the kind support of True Potential LLP.

The True Potential Centre for the Public Understanding of Finance (True Potential PUFin) is a pioneering Centre of Excellence for research in the development of personal financial capabilities. The establishment and activities of True Potential PUFin have been made possible thanks to the generous support of True Potential LLP, which has committed to a five-year programme of financial support for the Centre totalling £1.4 million.


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