Merryn's Blog

Good news for Edinburgh home owners: the gravy train is coming to town

Whether Scotland votes for independence or not, the size of the political establishment and its entourage is set to grow enormously. That can only be good for the Scottish capital’s housing market, says Merryn Somerset Webb.

It is festival time in Edinburgh. This means that you are pretty much obliged to either see a show or be in a show every day for a month. Mostly I choose the seeing option, but on Saturday, I allowed myself to be persuaded to go on Mrs Moneypenny's panel show.

You never know what kind of direction Mrs M is going to go in with this kind of thing, so my fellow guests and I braced ourselves for the worst when the questions started. The good news was that it was mostly pretty gentle (except for when she made us help audience members make bird feeders out of cotton wool and plastic bottles). However, she did rather go for me on the matter of property.

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I am, she noted, a well-known property bear. So why have I bought a house in Edinburgh? Regular readers will know the real reason for this - we wanted somewhere nice to live for the very long term and Edinburgh's rental stock wasn't doing it for us. But as I was answering Heather on this, and we were also talking about the possibility of Scottish independence, it occurred to me that buying in Edinburgh might not have been as bad a financial move as I once thought. Why? It's all about government.

There was an article in the FT yesterday about Washington. They come for the politics, said the headline. But, "they stay for the money". Half of former senators stay on in Washington as lobbyists once they leave office. The same goes for House members, while most "young congressional staffers see profitable futures at lobbying firms after a few years on government salaries". There is, you see, a "dazzling amount of money to be made in the neighbourhood of politics".

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Scotland has already taken on new tax raising powers and everyone knows that whether Scottish voters take Alex Salmond's word that independence will be just fabulous or not (all polls currently suggest not), more power is likely to be transferred. And with that power will come more government employees, more politicians, more lobbyists masquerading as thinktanks, more obvious lobbyists and every other kind of political groupie you can think of. They'll all be near a new and dazzling amount of money, and they'll all need somewhere to live.

That should be nice for Edinburgh home owners it won't actually make us any richer (taxes will have to go up to pay for the dazzling pile for starters), but it might make us feel a bit richer. These days when I find myself worrying about the future, I just re-read this article that is all about how "a surge of federal contractors and a rising tide of government spending" has pushed house prices in Washington DC to new highs.

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