Well endowed?

The market system continues to demonstrate its incapacity to efficiently provide people with a home. On 15 May the media was filled with reports of a crisis in endowment mortgages. Some 3.6 million people in the UK are facing a shortfall in their home mortgages, out of the some 6 million policy holders.

Endowment mortgages are a way of paying a mortgage by investing in the stock exchange. They enable policy holders to reduce their monthly repayment flow by only paying off the interest, while their policy matures in stock market investments to repay the original advance in a lump sum at the end of the loan period. Effectively, they allow people to buy houses by gambling on the state of the stock exchange.

These mortgages were very popular in the 1980s, a period when the Government were lauding the stock exchange and encouraging people to become home-owners. Poor results on the stock exchange, after the fallout from the speculative dot com bubble, have seen returns on endowments dwindle. A sample 25-year endowment maturing in 2001 would have fetched £93,145, whereas one maturing in 2002 would fetch some £77,096, a shortfall of £16,049.

Although the mortgage holders have benefited from recent low interest rates, many will still face a distressing and uncomfortable time finding the necessary money to keep a roof over their heads. Many are calling for investigations into possible mis-selling of endowment mortgages, with lenders being accused of playing down the risks involved in the policies.

Corporate perfidy is at most a symptom of the problem. As the master class continues to try to shape society into its own image, it encourages the workers to try to behave like capitalists: investing the resources they have to live on into the market casino. From their perspective, this both binds the workers to the interests of capital, and provides a source of money to manipulate for profit.

Without the reserves of resources that capitalists themselves have, though, workers leave their necessities of life exposed to the vagaries of competition. Where a capitalist just sees the magnitude of their fortune shrink, workers see their money becoming insufficient to maintain them. The distinction between the exchange value of money and its use value threatens the very homes of millions of workers, and very firmly sets out the barrier between the interests

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