UP UNTIL last week I had been feeling quite smug about the crisis in the housing market. It is true my husband and I bought our home on the outskirts of Glasgow 18 months ago, just as property prices peaked and the bubble prepared to burst. And that we paid substantially over the asking price because it was in the catchment for a number of sought-after secondary schools.
But in every other way, we were models of prudence. After the fiasco of our first mortgage – when we blithely signed up for an endowment policy which had as much chance of paying off our debt as a lottery ticket – we had done our homework, or so we t
hought. Older and more risk averse, we resisted the temptation of a high income multiple loan; vaguely aware of troubled waters ahead, we fixed our mortgage at 5.25% for five years.
Thus, when the first hints of unrest produced a slight rise in interest rates earlier this year, we patted ourselves on the back. And when the lending crisis made it difficult for homeowners to secure new mortgage deals, we told ourselves: "By the time we need to find a new package, this will all be over."
This self-satisfaction lasted until last week. Then, as the Bank of England slashed interest rates by 1.5 percentage points to 3% – the largest cut in 28 years, and the lowest rate since 1955 – I could almost hear the voice of retribution in my ear: "You're not so clever now, eh?" Oh, I know I should be pleased for all those who will benefit as the banks pass the cuts on, but – as I mourn the £130 a month I won't be saving – I can't help cursing our bad luck (aka lack of judgment). Not to mention the fact that the interest on our savings account was not fixed so what we lose on the swings, we'll lose on the roundabouts too.
My despondency was compounded by a walk round our neighbourhood – where many For Sale signs have been up so long they've taken on a tattered, weather-beaten look – and by a peek at a property price website which confirmed what we already feared: those houses which have changed hands since we bought ours went for considerably less.
Still, wallowing in self-pity is as iniquitous as gloating. So, in the spirit of Pollyanna, I resolved to look for all the positives that can be wrought out of our situation.
First of all, there is the knowledge that things could be much worse than they are. It is really very shallow to moan about such a small misfortune as missing out on a cut in interest rates when other people are losing their jobs and facing repossession. Dwelling on this, though, not only fails to distract me from my own petty woes, but reminds me of the larger ones that may lie round the corner.
Then there is the thought that the cocky estate agents, whose advice on how to get the best price for our last house was to stick a bottle of Balsamic vinegar on the kitchen bunker, are having to work that little bit harder for their share of the booty.
But then, to be fair, they did sell the property in under a week, and their jobs may be among those threatened, so I can't reasonably be cheered by that. I can't even take any succour from the fact that the economic downturn spells the demise of so-called "property porn" programmes, as I must be one of the few people in the country that didn't watch any.
My experience of house-buying has taught me one valuable lesson, though: that trying to educate myself on financial matters is a waste of my precious time. No more will I bother to force my drooping eyelids apart as BBC business correspondent Robert Peston explains the difference between the libor and the base rate; no more will I strike an interested and informed pose when others strike up a conversation about the relative merits of gold shares or bullion.
Because if the people who run our banks have no idea we're heading for disaster; if the Prime Minister can't predict what will happen to the stock market from one day to the next; if even the Queen – who surely spoke for us all when she asked: "Why did no one see this coming?" – is completely bewildered, then how can I be expected to make sense of it all?
Discovering I have no control over my financial destiny should be frightening, but I find it strangely liberating, because it removes the burden of responsibility and means I no longer have to pretend to care. The next time I receive a letter from my pension company, asking me if I think it should demutualise or if I'd like to swap guaranteed annuity rates for a one-off increase in my fund, I won't sit up for hours trying to pick my way through all the jargon: I will close my eyes and let fate decide which box I tick, safe in the knowledge that it's as reliable a way to choose as any other.
It's comforting, too, to think that all this uncertainty may encourage buyers to think of houses as family homes, rather than potential cash-cows and to be satisfied with what they've got rather than constantly looking to trade up.
Looked at from this perspective, lamenting the price I paid for our property or the mortgage deal I opted for is a futile, life-sapping exercise: we bought the house because we liked it. We still like it and the best way to make it a worthwhile investment is just to enjoy living in it. And to remember that (employment permitting) we have no plans to move again for at least 10 years, by which time the housing market will have recovered, share prices will be soaring and everything in the economic garden will be rosy again.
Or, at least, that's what the experts tell us.
The full article contains 1024 words and appears in Scotland On Sunday newspaper.
