For the best part of a decade Britain has been going property mad. It seems as if every person I meet has a sideline investing in bricks and mortar.
It’s even impossible to switch on the telly without encountering a schedule of shows about people buying, selling, renovating or losing their shirts on the housing market.
Last night I was in the bath (try not to think about it) – minding my own business and having a bit of a muse – when I had one of those flashes of inspiration that, had it arrived five years earlier, might have done me a bit of good.
I’d spent the earlier part of the evening looking at the property news, turning to the list of my own investments, spluttering, draining my glass and softly weeping into the sofa. No matter how many times I used the corkscrew the figures just wouldn’t add up, and it wasn’t until I’d slipped into a soapy lather I realised that maybe this is because they never added up in the first place.
I’m not talking about the credit crunch here – that’s a natural market readjustment that’s being wildly over-hyped by the press. No, what bothers me is that for some bizarre reason, when it comes to property speculation we seem to have suspended the basic laws of business.
You know the old adage that you never lose money on bricks and mortar? Well, this particular piece of received wisdom is the product of a forgotten time. When I was growing up in an Edinburgh council house (well, ok, it was a flat in Leith) in the late seventies the vast majority of people lived in rented accommodation and true enough, if you were able to haul yourself onto the property ladder then the chances were that you’d make money on the deal.
But flash forwards a couple of decades and the situation has changed beyond all recognition. These days the majority of folk own their own home and broadly speaking, an entire generation has settled upon the property market as a means for investing in their old age.
The problem with this is that in order to realise their profits, generation X are going to have to put their ventures up for sale at roughly the same time, so a glut of these properties will be hitting the market.
Now I’m no Alan Greenspan, but my understanding of the fundamental laws of economics is that when supply suddenly rises against demand then prices inevitably fall – meaning that those who’ve pinned their futures on house values will, to use technical fiscal terminology, be completely screwed.
Maybe there’s a complex equation out there somewhere to prove that the property business is immune to basic economic principles, but I can’t help feeling that Britain needs to get over its obsession with home ownership.
Your housing needs change throughout your life anyway – shifting from shared flats to family homes to retirement bungalows with barely a bye or leave – and that leaves me wondering if many people wouldn’t be better off renting in the first place.
You can argue that renting accommodation is just throwing money away, but let’s face it: you’re never going to get to spend that cash anyway. The investment that’s locked up in your property will in all likelihood simply be transferred from home to home as you move through life, meaning that by the time you’re ready to liquidate the profits you’ll be dead, and your children will probably just blow them on foreign holidays and a flashier car.
But that’s only if the property market hasn’t collapsed completely by the time you finally peg it.
I’ve just been reading that the experts reckon we’re long overdue a global pandemic and given that the last one (Spanish Flu) killed 200,000 Britons in under six months, it seems that we’re only one particularly virulent Ebola strain away from the point where the best thing you can do with a house is break it up for kindling.
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