The worst is over…? Possibly

Tuesday’s Today programme on Radio 4 featured a gentleman from the Building Society Association to talk about the latest BSA report and how it reflected the current housing market.  It was interesting to hear that mortgage transaction levels are increasing but I was slightly concerned that the phrases of, “the worst is over” and “confidence is back” were used in conjunction with the Help-To-Buy Scheme.  This only has a three year life span and one does have to ask what happens when it finishes.  Will confidence have fully retuned by then or will a false bubble have been created that cannot be sustained?  I don’t want to seem to be the next Victor Meldrew but I do think that a note of caution should be sounded;  particularly as people tend to exhibit a sheep-like mentality with spectacularly short memories. Also touched upon in the discussion was the use of regional figures to determine the national average rise in house prices.  We all appreciate how an average figure is obtained but as was pointed out by the interviewer, the statistics for London and the South East are not reflective of the rest of the country and contribute to a false average reading.  The interviewee further commented that it was Russian money invested in the quality end of the market that was driving up house prices in the London area.  I have been looking hard recently but I haven’t found any Russian money in Northville, Southville or Ringland.