It is on occasion difficult not to roll a jaundiced eye at the selective editing and manner in which events are presented to us, the great unwashed, general public. Last Thursday saw the announcement, with much feverish emotion , that UK house prices showed their biggest rise in three months in January 2014. The data supplied by the Halifax (part of Lloyds Banking Group – that bastion of business efficiency – as experienced by all those who had their debit cards declined a just over a week ago), produced data demonstrating that house prices in the three months to January were 7.3% higher than a year earlier, a slightly slower rate of increase than December’s 7.5% but still close to November’s six-year high of 7.7%. “The Strong Halifax data will fuel concern that a house price bubble is developing” [sic], said Howard Archer, chief UK economist at IHS Global Insight (no, me neither). Mr Archer also commented that the concern over the strength of house price rises has been primarily focused in London, but that data from a number of recent surveys shows, “that the strength in house prices is becoming more widespread” [sic]. If ever there was an instance of making a comment that means something, but at the same time means nothing, this was it. Hedging one’s bets and giving the most general view possible spring to mind. Without a doubt, there is more activity in the housing market, but it is the same percentage driven outpourings that when drilled down to establish the actual facts, establish that whilst London careers away on its own supersonic trajectory (a huge amount of it funded by foreign buyers), the rest of the country is improving, but at a steadier, and crucially, healthier rate.
The hysteria over an impending housing crisis was further fortified by headlines vociferating that the Chancellor of the Exchequer, no less, “has admitted that UK housing supply will struggle to keep up with demand for the next decade..” [sic] Financial Times February 5 2014. Before I go any further, may I just point out what I deem to be a housing crisis. Take a look at the poor beleaguered souls in Somerset who have been cut off from the rest of the civilised world for weeks. These people are in the midst of a crisis with no foreseeable end to their woes; not least because as a result of the pseudo-biblical, ‘natural’ (aided and abetted by the Environment Agency), disaster that has befallen them, the value of their homes has plummeted on a par with the rising levels of the flood water. Anyway, back to George. What he actually said when giving evidence to the House of Lords Economic Affairs Select Committee, was that the Office for Budget Responsibility forecast a rise in house prices but with far less gusto than my counterparts in other parts of the country i.e. local estate agents, referred to by Tim Harford in the Financial Times, as “private sector forecasters”. Of course, this title can be awarded to many; your mate down the pub, his mother, his pet dog, his mother’s pet dog… Mr Osborne did predict a continued shortfall of supply and commentators immediately pounced upon this as a certainty that house prices can only go up and that this is intrinsically linked to low interest rates. According to the experts, low interest rates are encouraging people to spend and high interest rates will put the kibosh on this. Trust me, when the country has ‘confidence’ and lots of overtime, people don’t give a f&%$ about interest rates. Would anyone care to join me in remembering how many Mercs and BMW’s were parked on people’s driveways during the house price boom when interest rates were at high single figures and going northwards?
Last week did raise many questions on a number of issues. I have just a couple more to add to the list for the next edition of Question Time. Tell me Ms Weng, acknowledging your admiration of, butts, legs and tall men with piercing blue eyes, what first attracted you to the billionaire, not-so-tall, bespectacled Rupert Murdoch? And Tone, what could the Lucy Liu-lookalike Ms Weng offer you compared to the not so Lucy Liu-like Cherie?