It’s senseless to ask how things are going to end, because things as a general rule don’t. They rumble on, they morph, and yesterday’s drama becomes tomorrow’s eyebrow-raising justification for thinking that people used to be inexplicable idiots. Nonetheless, I read these stories of house prices rising again and I cannot help but wonder. How is it going to end?
How is it even supposed to end? What is Mark Carney’s golden future? Interest rates stay low, repayments stay low, house prices keep going up and then… what? How do all these people who have overextended themselves eventually underextend themselves so as not to be utterly buggered when rates finally go back up again? What is the correct verb for underextending yourself? Is there one? Have they even planned for that?
Presumably it’s all about inflation. Presumably the idea is that mortgages grow and grow, pound for pound, but that’s going to be OK because each of those pounds, eventually, will be worth much less. Right? So, when your £200,000 mortgage is actually worth no more than, say, 200,000 Zimbabwe dollars were worth in 2009 just before they scrapped them (basically nothing: a grain of salt, a pinch of sand) then the debt has gone and you’re laughing. But what about everybody else? What about all the other stuff you have to buy in the interim? I mean, Christ, what sort of plan is this?
Never mind the savers, because I increasingly think they’re a mythical construct; something everybody has heard about but nobody has ever seen with the naked eye; the griffins, rocs and hippogriffs of the financial world. What about all the people who simply have to buy houses between then and now? Because it’s not like everybody is just going to take a breather from being alive for a couple of decades while this inflation does its magic, is it? No. Inflation goes up and up, and house prices go with it. And everything just gets worse.
My perspective on this is skewed, obviously, with my being metropolitan London scum etc, and thus having had the enormous privilege of spending ten times my annual salary on the sort of charmingly ramshackle pile of bricks that a Yorkshireman wouldn’t keep his pigs in. Houses in London are so expensive these days that the mind somewhat boggles at the thought that there are actually enough rich people around to buy them all. And of course there aren’t. It’s all debt. That special sort of debt that is perfectly serviceable and safe just so long as nothing whatsoever changes at all.
My experience, though, is everybody’s future. House prices are soaring everywhere, aided by the low interest rates we can’t afford to change and the government’s bizarre, cynical help-to-buy scheme. Home ownership, once seen as a ladder out of poverty, has become a millstone of the middle. It’s where all our money goes, meaning that it can’t go anywhere else, meaning that we grow ever richer on paper, but with nothing left to spend. Monetary sadhus we are, balanced precariously on piles of borrowed cash.
I mean, look, I know I’m an idiot. And I know that I give an impression of even greater idiocy sometimes, by writing conversationally about the sort of stuff that convention dictates ought to be only approached in sombre tones by people who write as though they have never laughed or smiled. But I do not understand how this is all going to be OK. Moreover, I don’t see any reason any more to assume that anybody else does either. Brrr. Best of luck.
This week, as you’ll probably have gathered by now from the bouncing chests of beaming triplets in vests, is A-level week. So as people across England collect the results that may perhaps send them off to university, consider this: when they get there, they are less likely to meet Scots than ever before. In 2012, Scottish applications to English universities slumped and they have stayed slumped. This year, barely 3 per cent of Scottish 18-year-olds applied to go to university outside Scotland. This compares with around a quarter of Welsh students seeking to study outside Wales, and almost a third of Northern Irish students wishing to do so outside Northern Ireland.
Scottish students, it’s true, have always vastly preferred to stay at home, not least because Scotland has excellent universities of its own. But the numbers are now dwindling into a highly significant insignificance, and for one simple reason. Tuition fees. Today, Scots who cross the border pay £9,000 a year, and Scots who stay at home pay nothing at all.
I’m not one for conspiracy theories. I do believe that when Alex Salmond said that ‘rocks would melt in the sun’ before Scottish students would be asked to pay for their education, his principles were sincere and his political calculations were short term. But this is how neighbours become strangers. This is a whole generation of educated, affluent, middle-class Scots hitting adulthood without experience of England, or close English friends, or a sense of the south being in any way theirs at all. Even in such a world, probably, Unionism can survive as a political ideal. But it will never go to the bone.
Hugo Rifkind is a writer for the Times.
This article first appeared in the print edition of The Spectator magazine, dated 17 August 2013Tags: borrowing, fees, home ownership, house prices, mortgages, Scotland, Students, univeristy