Light and dark. Good and evil. Balance exists. But unlike abstract notions and universal physical properties, there are some balances that we lie right in the middle of, that we attach ourselves to like the teddy we left behind as children.
Economic perspectives is one of these balances. A New Statesman article on the future of the British Housing Market (link via yezzer) is gloomy. Overly gloomy almost. But gloom comes from nowhere. And the gloom for this is extra dark because, on balance, it is needed to counter the over-optimistic and unsustainable glee/naivety that's pervaded throughout British culture for the past 5 years.
The reasons behind the swing are, of course, complex (and fascinating, from a systemic point of view). As the NS points out, prices are high for some obvious reasons: Firstly, there's been a lot of influx and immigration. Alongside an ever-increasing trend towards individuals owning properties and less people per property, this has seen demand shoot up. Secondly, I still think we're seeing a "pop" of inflation arising from suddenly-spare capital after the Baby-Boom generation retire, finish paying off their mortgages, and look to giving their cash to up and coming family members.
The crash is going to be hard, and is going to be different this time, for further reasons: Firstly, the demand is not necessarily a sustained one. Migrants are not in sure supply - there is no reason they should stay in the UK, and no reason why more should continue to flow in. This amplifies economic downturn. Secondly, the Baby Boom population is a temporary demographic "blip".
Between these two, we are caught between a pincer movement of globalisation. The past - a war that united countries, but split up families. And the future - increasing competition, not just for jobs, but for food and energy as well. Yup, maybe we'd be better off spending all that sudden release of cash on food, rather than roofs. or on skills and training. Something to keep us alive, to maintain us, rather than something we need to maintain instead. After all that, maybe investing in houses is actually just an oxymoron.
Thinking back, this idea of a house as an "investment" is something which appears to have been overlooked. After the markets crashed a few times, people were no longer sure what to cling to. Housing was seen as a "safe bet", because house prices "always go up". People started flocking to property as the most secure form of asset. Even if they weren't secure, people maybe subconsciously figured, at least if they crashed we'd be in it together, and then once the crash stopped (like, 6 months later), then we'd be back on the way up, together. Hurray.
As we're finding out, a house isn't just something you nip out to the shops to buy. A house is an ongoing effort rather than an investment. It's a relationship, not an ownership. And if you're going to maintain that relationship, you need inputs. Cash. Knowledge. Skills. Perhaps this is where all those property programmes sprang up from - a desire to know how to own a house.
Set against the UK attitude for skills and industry, the future looks increasingly bleak. When companies are complaining about new employees not having basic skills - as well as not being trained for a job or run our infrastructure - then we have to wonder what the hell our education and training systems (or cultures) are playing at.
In short, we face a shoddy future because companies are happy to employ people from countries with better education systems, and our education system is more intent on getting us to follow protocol than to learn anything useful. Houses became our life-rafts once we realised this, and the British government don't really care, so long as it's the companies making profits. (Profits - GDP - look fine on the balance sheet.) Now it turns out we had just no idea what kind of neurotic high-level son-of-a-bitch patient the life-raft actually is.
And we've certainly never been taught how to steer one.