Monday 2 September 2002

To rent or to buy?

The Scotsman reports today that houses in Edinburgh are now going for as much as £2 million. Professor Andrew Oswald of Warwick University suggests that it's time we went back to renting. There is much to be said for his argument. As the professor says:
Renting is beneficial for a country. Arguably the world’s most prosperous and peaceable nation is Switzerland. Yet it has the highest rate of renting in the western world. Two thirds of Swiss are renters. All works as sweetly as their clocks. After the war, most Britons lived in privately rented accommodation. Now, only one person in ten does. In my judgment, that is a bad thing.
So why don't we follow the Swiss example? In a word: inflation. The Swiss can invest knowing that their capital will be safe. In the UK, the pound has lost 98% of its value since 1913. It's not so bad in the US. Since 1913, when the Federal Reserve was founded, the dollar has lost a mere 95% of its value. That is why we English speakers like to put our money in houses.The only way to stop the British obsession with home ownership is to establish a sound currency. We could adopt the Swiss Franc - certainly not the Euro. Better still would be to have a 100% gold-backed currency of our own. Now there's a challenge for Scotland's banks.