Jiva Technology

Investing in a house vs investing in the economy

In the past few weeks, all the fevered talk of rising house prices has brought home to me, once again, how obsessed the UK is with house prices, particularly in comparison to … well anyone. It’s all well and good, most nations have their foibles, but some are more harmful than others. In all of the dialogue regarding house prices, there is an implicit message that in the UK, the way to wealth is to buy a house. Not start a company or invest in new (or old) ideas or even to invest in the real economy. Just buy a house. And, of course, rising house prices doesn’t really make the nation richer, except when we sell them people overseas, something which is going on at a rate of knots in London and is akin to sawing off the branch that you’re sitting on in my opinion.

Is it possible that all of this ‘investment’ in the housing market is diverting resources away from investment in the economy? Would you rather invest some of your cash in a start up or a 2 bed in Bermondsey? And what are the implications for our future or even, our children’s future. Is it a coincidence that house prices at the same time as youth unemployment. Investment in the real economy creates jobs for now and the future, buying a 2 bed in Bermondsey doesn’t, especially if that 2 bed was built 30 years ago.

Once again, the law of unintended consequences weaves it’s magic spell.

Contact

Regus House
1 Friary

Temple Quay
Bristol
BS1 6EA
United Kingdom