[buserror]

Have you factored the tax you would pay on any money you make? Thats 40% -- if you take this into consideration, price rises aren't THAT extraordinary...

I'm also one of the lucky one whose house price has risen by 25% over the last 2.5 years. However, it means I'd have to pay 40% tax on that delta, leaving me in no position to buy anything equivalent (let alone better) in the same area.

The only people who 'profit' are people who want to seriously downsize or leave the 'red' areas. Everyone else is on the same mad train, apart from the banks, solicitors, insurers, estate agents, 'developers' and other bubble hangers on.

[jameshart]

Are you sure about that tax situation? I'm not a UK taxpayer any more, but my understanding is that you shouldn't pay 40% on increased valuation of your home for selling it.

1) asset appreciation will be taxed at capital gains rates, not marginal income rates. That tops out at 28%, not 40% 2) with some exceptions, primary dwellings aren't subject to capital gains tax when sold.

[flashm]

Fortunately in the UK you don't pay capital gains tax on the property you live in.

You pay it on your second property I believe, but only if you sell, and only if it is a second property at that point.

CGT is also only 10% or 20% depending on your earning situation.