Monday, Sep 06, 2010
Mainstream press continues relentless march to capitulation?
Metro: Lower house prices are NOT a bad thing
Excellent BEARISH consideration in a paper with a readership of over 3.2 million (http://bit.ly/dyntAr). Three letters in top right hand corner of page 42. Graeme Brown, director of Shelter Scotland speaks sense, albeit a tad cautiously, as he states "there is a general assumption that rising prices are a good thing but maybe we have become too accustomed to the hyper-house price inflation of the past 15 years" and in conclusion promotes the idea of seeing "the return of house prices to to some semblance of sanity as something to be celebrated not feared." Two other letters presumably to add "balance" (lol!), including the comically naive/ignorant "Maria" from Northamptonshire who likely doesn't even exist. (n.b. you need to supply an email address to read the Metro's "e-edition").
12 Comments
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1. mark wadsworth said...
The bloke from Shelter came closest to talking good sense. Maria seems to be a bit stupid - she says that FTBs need 100% mortgages again.
Wrong! If the banks cut it to max 50% mortgages or 2 x income that would be the best thing that could possible happen to FTBs (collectively).
2. This comment has been removed as it was found to be in breach of our Blog Policies.
3. str 2007 said...
Agreed Mark
It never ceases to amaze me how hoodwinked the general population are into believeing 'house prices are' : therefore we need help (with multiples and small deposits etc).
As opposed to : that help we asked for has made house prices what they are.
It'll take some convincing to convert the brainwashed masses that actually houses at a lower level would be a good thing.
4. drewster said...
This isn't an article in Metro, it's only the Letters section.
(btw you can supply a fake email address and it will still let you in)
5. drewster said...
For what it's worth, I don't think it counts as mainstream until both the Daily Mail and the Express capitulate. Ironically when it does happen it will probably be a contrarian indicator.
6. Sarah said...
I'm using my father-in-law as a contrarian indicator. When he tells me to steer clear of property then it's time to pile in. Mind you, he does read the Mail.
7. Rantnrave said...
Article / letters in full from this:
Lower House Prices Are Not A Bad Thing
Behind the house price crash headlines lies the simple fact that house prices may be flat-lining or even falling modestly. There is a general assumption that rising house prices are a good thing but maybe we have become too accustomed to the hyper house-price inflation of the
past 15 years. And the result? Record numbers of first-time buyers locked out of the market, too high land prices causing knock-on effects on the public purse by making social housing programmes unaffordable and a private sector development model that is trapped into gambling on rising land prices as its main source of profit.
All of this is economically inefficient, socially divisive and grossly unsustainable. Let’s start to see the return of house prices to some semblance of sanity as something to be celebrated, not feared. Graeme Brown, director, Shelter Scotland
Falling house prices sounds like good news for first-time buyers hoping to get on the property ladder, but the amount needed for a deposit is still ridiculous. The sooner 100 per cent mortgages return, the sooner the market will stop stagnating.
Maria, Northamptonshire
The only people who will suffer are the property spivs and money lenders who have crippled the British economy. David Barker, East Sussex
8. mick rupert said...
@ Drewster (3): don't underestimate the power of the letters section in any publication. The letters section is the voice of the readership. My old Politics 'A'-Level teacher used to tell us that he'd always read the letters section first... :-)
@MW (1) & @STR2007 (2): totally agree, and actually there was an entertainingly surreal comment on people's understanding of economics and/or the housing market on Roger Bootle's Telegraph article posted earlier today:
"Bootle is applying reason to the housing market and asking ordinary Brits to decode his words as a series of reasonable propositional claims. He would be as well trying to teach jam to swim. The British have the same facility for thinking carefully about the property market that a Komodo Dragon has for debugging software. "
9. mark wadsworth said...
@ Mick Rupert - I'm sure you can teach jam to swim, actually - what about jelly(fish)?
The good news is that economics always wins out in the end - the bad news is the politicians will do anything to fly in the face of logic (whether that is propping up house prices or imposing a National Minimum Wage or subsidising windmills).
10. the number cruncher said...
MW - some thoughts on your last post, to add a little depth to your 'tea party' esque simplicity:
1. Economics realities are in a 'dynamic equilibrium' with forces that seek to control them - they never win out in the end
2. The national minimum wage is a very good method of getting people off benefits and has its uses (social benefits impart a minimum wage anyway)
3. Subsidising technology is actually economically vital with some new technologies as often there are such barriers to entry of new (and better) technology that they are never adopted unless some can overcome the investment hurdle. (agreed windmills and the powers that influence government spending may send us down inefficient blind allies) Most of our infrastructure: nuclear power, roads, railways, national grid, telephone system, water have received government subsidies that dwarf anything sustainable energy has received.
11. mark wadsworth said...
TNC,
1 Economics wins, but the battle can be ugly and expensive - and there are plenty of vested interests masquerading as "free marketeers" (like the banks!).
2. Having a Citizen's Basic Income and much less means testing would be a far better way.
3. "Most of our infrastructure: nuclear power, roads, railways, national grid, telephone system, water have received government subsidies" Agreed, and with the possible exception of nuclear, rightly so - because these things enhance economic capacity (and hence land values) and so they pay for themselves (and the free market would not provide them for the simple reason it requires the force of the state to ram through planning permission). And apart from nuclear, this was all tried and tested stuff before 'the state' got involved.
12. the number cruncher said...
MW
I agree with much of what you sat but your analysis is still too simplistic.
on question 3 - no, you are wrong, all the things I mentioned where mostly backed by state intervention for proper efficient development and deployment as I stated and not by the private sector. The private sector may have been involved but with huge state intervention and direction (as they where across Europe and the USA and Canada for that matter).