Sunday, 6 September 2009

More "good news" on housing

It always amazes me how journalists equate house price inflation with good news about the economy. Weren't they paying attention, when half our banking system almost crashed last year? Can they recall the reason why Banks like NRK, RBS and HBOS began to wobble?

From today's Telegraph....

A surge in new buyer inquiries, and rises in mortgage approvals have signalled that conditions have bottomed out.

The most startling trend though has been house prices. Nationwide has reported house price rises in five of the past six months, and is now expecting prices overall in 2009 to rise in the region of 0-5pc.

Rival Halifax has reported fewer rises – two out of the last four months – but is expected by economists to say this week that house prices rose again in August.

So undeniably the picture is looking rosier for the housing market, and house prices are likely to continue to stabilise for the rest of this year and into 2010.

But the prices we have seen over the past six months do not necessarily signal the beginning of a smooth or strong recovery, and risks remain which could threaten to derail recovery in the market where the recession began.


electro-kevin said...

One of the reasons for housing speculation is that pensions have been ruined.

How is that good ?

Anonymous said...

Since the UK's financial system became third world, and run by sex-mad cocaine addicts with no scrupples, most Brits with wealth have used houses as trading chips to preserve their wealth. In turn, the banks have used mortgages and inflated wealth valuations to raise cash for overseas investments. It is a brilliant if fraudulant little game.

Anonymous said...

No doubt as soon as I buy and commit to a monster mortgage the whole thing will collapse for real!

Mark Wadsworth said...

Don't worry, The Spring Bounce is nearly over.

@ EK, when you say "pensions" do you mean the patchy state pension/Pensions Credit (which ought to be replaced with a flat rate taxpayer-funded Citizen's Pension) or private pensions (which are a massive scam perpetrated by, and for the benefit of, the pensions 'industry')?

The difference is partly down to taxation etc. If we taxed businesses less and housing wealth more, we wouldn't have this problem.

Anonymous said...

Yeeha!! Agreeing with MW again. Twice inside a fortnight.

DBC Reed said...

Actually the higher class of financial journalist tends to support Land Value Tax which would stop cheap credit going into housing: Martin Wolf & Sam Brittan of FT; Ashley Seager& Larry Elliott of Guardian whose Polly Toynbee is not averse, though not a financial journalist.Edmund Conway has had a nibble at LVT in the Telegraph.
Perhaps the fault lies with the teaching of Economics and all that mathematical modelling which led to the Black Scholes formula winning its inventors a Nobel prize though it did n't work and caused the Long Term Capital Management market seize-up.
Students of the subject long ago rebelled against it being taken over by mathematicians and formed the stunningly un-PC titled Post Autistic Economic Movement,now unsurprisingly renamed.
You would think highly paid journalists on the Express and Mail would pause for one moment in their endless Big Lie propaganda:wage inflation bad;house price inflation good!But the house prices uber alles orthodoxy is amazingly strong and unquestioned.