Transcript
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.