The property market has become a Ponzi scheme
Back in 1990, when my wife and I were buying our first flat in London, I was writing advertising copy for a little-known American software company. The people seemed remarkably impressive and I considered buying shares in them. A banker friend advised caution, however, arguing that overseas stock exposed you to exchange rate fluctuations. The company was called Microsoft. Had I put the £68,000 I used to buy that flat into Microsoft stock, it would now be worth £54 million. Naturally, every time I meet my friend, I thank him for his helpful advice. But in truth my jibe is unfair. You see, I didn’t have £68,000 to spare. And, while there was no shortage of financial institutions happy to lend me £60,000 to buy a flat, no one would lend me anything to buy stock.
