Saturday, December 29, 2007

Worst reporting… ever!

House prices rising again

Home owners are breathing a sigh of relief after new figures revealed house prices are rising again in many areas. A predicted slump in the housing market has not arisen, despite the credit crunch. Latest research by the building society Nationwide yesterday revealed prices nationally were up 4.8 per cent year on year. Housing expert Peter Bolton King from the National Association of Estate Agents, said: “Despite the considerable doom and gloom lately, the figures show that there is no need for pessimism.

Posted by little professor @ 08:55 AM (3835 views)
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47 thoughts on “Worst reporting… ever!

  • little professor says:

    This is honestly the worst misreporting of property news I have ever seen. The Nationwide figures showed that house prices dropped for the third month in a row, falling 0.5% in December. This brought down the annual rate of HPI to 4.8%. Yet somehow they have misconstrued this as positive news.

    What’s worse is that this rubbish is on the front page – many people will just see the headline and assume all is well in property land:

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  • The Daily Express – does it still have a readership?

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  • Amazing to lie blatantly… Amazing!

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  • There are two theories:

    1. The incompetence theory.
    2. The conspiracy theory.

    Most people think houses will be on a downward glidepath for the first half of 2008, so I wonder how long the Express can keep up this nonsense?

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  • tyrellcorporation says:

    Two words…Desperate and laughable!

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  • I cannot even begin to believe that a journalist and editor could be so jointly thick as to publish this drivel. There must be VIs involved somewhere! This is misrepeorting on a grand scale.

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  • Property prices have defied gravity for too long and August 2007 looks to me like the top of the market with a subsequent downward trend, irrespective of what is said in any newspaper. Property prices will be determined by current and near future economics not newspaper headlines no matter how much they (and the Government) try to prop up the market.

    The question of a correction in UK house prices was never in doubt the difficulty was in predicting when it would commence, now that it has the next difficult prediction is whether we get a steady month on month reduction i.e. slow decline or whether the market “tail spins” and falls rapidly?

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  • Hi everyone this is my first post, I find this site very interesting and I have been reading for quite a while, though I don’t pretend to understand it all.

    This article is the worst kind of spin as some of their misguided readers may actually believe it, this is reporting at its absolute worst. To my mind the VIs are their advertisers as this is one of the advertising popups that you get on the website (http://search.uk.miva.com/Search/Seasonal/Results.asp?AffiliateID=5132).

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  • April fools has come early then in 2008!

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  • How could you guys say such things! If you look under the “Daily Express” title on the home page ( http://www.express.co.uk/) you will see the phrase “THE WORLD’S GREATEST NEWSPAPER”

    However there are other opinions like Capital Economics who have revised their predictions recently:
    “We expect house prices to fall 5% next year and by a further 8% in 2009, wiping out the gains of the last 18 months.

    The long overdue housing market correction now appears to be underway” Ed Stansfield

    http://news.bbc.co.uk/2/hi/business/7150229.stm

    These figures from Capital Economics are more recent and more bearish than those on the hpc list.

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  • Daringsneakybeaver says:

    HAHAHAHAHA THIS IS HILARIOUS – MADE MY YEAR!
    It should be a criminal offence to reporting things as irresponsibly as this. It’s like saying in the year 2000 that “the Nasdaq is higher than a year ago, so it’s still going up”.

    Housing is the new Nasdaq, watch it CRUNCH. It hasn’t actually been going up as much as people were led to believe by virtue of bent statistics and grossly misrepresentative reporting and propaganda by people with vested interests (estate agents, mortgage companies, politicians) who prey on the uninformed and unsophisticated.
    Property has already gone down a lot further than is being reported anywhere e.g. London commercial down 36%, East Anglia residential down 15-20% and still there’s no buyers because nobody can borrow the money needed to pay these still-insane prices. Loan-to-Value multiplies are the real story, down from 95% to 75% or even 70%, which when you do the maths takes the money you can raise with a £25k deposit down from £500k to £100k or even less. That’s right, an 80% (yes EIGHTY PERCENT) drop or more. Prices can’t stop sliding until either LTV’s go back up again (not going to happen until after prices bottom and start back up one day) or prices come down to meet what people can raise (the only possible alternative).
    The last housing down-turn wasn’t from such moronic, giddy heights and took 5 years to bottom out. Get ready for a bigger crunch this time around …. at least 50%, at least 5 years. Housing shortage, population growth …. they said it all in Tokyo in 1989 and Hong Kong in 1997 …. it’s the same darn pattern again and again and yet we never seem to learn en masse …….

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  • Given the Express has ONLY three stories Madeline, Diana and House Prices then I am not surprised this story has come up must be a House Prices Day. Absolutely this is the worst piece of Propoganda since Hitlers Generals tried to convince him as the Allied troups were in Berlin that it was just a minor set back…..

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  • People,

    You can tell the Daily Express what you think of them my emailing ‘[email protected]’. I just did this and here’s what I wrote:

    “Dear Daily Express,

    How can you possibly print the headline “House Prices Rising Again” when the Nationwide has reported UK house prices FALLING for the second month in a row?

    You must all be completely bonkers!

    Or perhaps you are being paid by the estate agents, surveyors and other vested interests whose biased opinions are sprinkled throughout your article?

    Yours faithfully,

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  • Harold absolutely the Express does have a readership, the Editor must read it before it goes out the door so that’s atleast 1 person…

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  • I totally disagree with the Express.

    However, isn’t there a slight possibility that if interest rates are cut dramatically it could kick start a revival like 2005?

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  • David

    In theory it is possible, but I would have thought, bearing all the other factors in mind, that it would be extremely unlikely.

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  • At least it’s knocked Diana off the front page, but highlights the true agenda of the Express.

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  • House prices and Madeleine McCann. Makes a change from Lady Di I suppose.

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  • Daily Express Grand Old Duke of York house price index – when it goes up it goes up and when it goes down it goes down and when it is only half way up it is neither up nor down

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  • But an annual increase of 4.8% is still less then what I am getting from the money in my bank account.

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  • The Express ‘have your say’ comments are worth a glance..

    Pathetic journalism – even by the miserable standards of the Express..

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  • If the Express is right and rates do drop to 4.5% then maybe house prices could shoot up again?

    A 0.25% drop in 2005 caused it.

    Surely a cut of over 1% could do the same?

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  • David – it is entirely possible that the Daily Express are right. Maybe interest rates will go down and house prices will go up again – but look at the standard of journalism!! Where is the initellectual rigour?? If they are right it will be by coincidence – taking any note of this paper is not ebtter than rolling a dice.

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  • Serious question, which I hope someone may be able to answer…….

    If the UK cut rates – does it really spell the end of the GBP? or does it increase demand for the currency for the carry trade? Will cutting rates strengthen or weaken the pound?

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  • It’s an interesting leader. I am wondering why it has been chosen…..

    Is it to try & restore confidence, stimulate growth?

    Perhaps it’s more to do with the editor trying to show he is right?

    Is it is really the truth?

    One thing is very clear, it’s too early to tell either way, but I would say that all the signs seem to indicating tough times ahead…

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  • Look what it did to the Dollar ? I’m not in favor of censorship but when newspapers are allowed to print this distorted vision of the economy then you have to wonder how far this could go ? Very sad.

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  • No-one should pay any attention to what the Daily Express has to say at all about anything.

    Their reportng of the McCann story became so schizophrenic this year I wondered if they weren’t just getting their copy from a ‘Numberwang’ * style random story generator. Perhaps we should treat this awful rag with the contempt it deserves refering to the tosh it prints as merely ‘Expresswang’.

    Private Eye has regularly and this rightly lampooned the Express over this matter with the Lord Gnome editorial column at one time even offering a cut-out-and-keep story generator with instructions on how hacks should use it to make up tomorrow’s scandalous bunkum.

    *Numberwang was a Mitchell and Weeb spoof of a fictional TV quiz game where contestants randomly call out numbers only for the host to occasionally interject inexplicably with the catchphrase “That’s Numberwang!”. Videos are on youtube for the uninitiated.

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  • Also no one should forget the headlines printed in the Evening Standard a few months ago to bolster Brown’s flagging fortunes which screamed something along the lines of ‘House Prices Surge at Record Rates’ or some twaddle.

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  • @ inbreda,

    The UK has the highest rates in the G7 group. Therefore people from other nations invest money in the UK to collect these higher rates. If the UK drops the rates, then this country becomes a less attractive place to place money.

    Also, as the levels of debt rise to exceptional levels, a premium is expected (on top of the interest offered by the borrower) to allow for risk.

    The suggestion of further rate cuts has recently weakened the pound against more robust currencies like the Euro. The Pound is currently trading at an all time low vs the Euro. If the Euro sits tight and the UK cuts rates beyond 0.25% (expected in January/February), then expect the pound to slide downward.

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  • Yeah – its simple, and its called the carry trade in forex trading. Move highly leveraged money (typically you can get an LTV of 99%!) from a currency with a low interest rate (e.g. Japan’s has been at 0% for a long time), to one with a high interest rate (e.g. £ sterling), and get the difference in interest payments in your favour. In a normal market this works because the differential causes traders to buy the currency with the higher rate, which also pushes the value of the currency up relative to the other. So you win both on the extra interest and on the appreciation in value of the higher currency vs the lower. But with the low-interest currencies appreciating as money is withdrawn, this can wipe out the interest gain quite easily, in which case it is said to unwind. Couple that with the BoE lowering rates, and you get an accelerated downtrend in the currency with the higher rate, which is why the pound is collapsing fairly quickly – merely the expectation of lower interest rates is enough to have this effect. Since this is going to make imports more expensive (and there is precious little domestic manufacturing capability to take up the slack), this will feed into inflation, so the BoE will have to consider the effect of a lower pound very carefully and set interest rates accordingly.

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  • Dohousescrashinthewoods says:

    What a load of totty!

    On the other hand, I was seriously impressed with Moneybox Live on Radio 4 earlier, where they had a remarkably straight-bat discussion of house prices and the economy. The economist even said “and that is just a guess”. I was really pleased to see an “expert” voluntarily admitting that they can’t be sure. Even the presenter was being open about the state of the market. There is hope.

    I’ll see if I can post a link

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  • I first heard about this article on News24 review of the front pages at 2am this morning. There was an article on house prices, but it was totally opposite with headline stating house prices continue to fall. I thought they had got the title wrong, but had a glance through the article and it did talk about price falls. It was really odd, because the newsreader was reading the printed paper, and they both quoted same source of statistics but opposite viewpoints. The article has now been change on the dailyexpress web site to match the printed paper. Seems like an editor has stepped in at last minute and changed the article before it went to print.

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  • Keith said: Hi everyone this is my first post, I find this site very interesting and I have been reading for quite a while, though I don’t pretend to understand it all.

    Hi Keith. It’s good to see new people posting here. Don’t worry about not understanding it all; you’re bound to understand more than me! The guys here are really helpful so don’t worry if you need to ask for clarification on something.

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  • it_is_going_with_a_bang says:

    A tabloid newspaper just printing what it thinks people want to hear? Surely not!
    LOL
    The only thing that mattered was the number of copies sold. The problem with House prices predictions is that nobody has to be right or wrong.
    What would be obvious to anyone with half a brain cell is the only people ‘quoted’ in he article are VI’s.
    Its all in there : rates at “4.5% or lower” / “rate cuts WILL boost the market” la de da.

    There is absolutely nothing new in the article whatsoever, just a very one sided view from a bunch of people who’s business is currently experiencing a 50% reduction in turnover. Desperate times call for desperate acts. The fact that half the country is virtually bankrupt doesnt seem to get a mention.

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  • dohousescrashinthewoods says:

    Just been down to our local coffee shop and seen this edition in the flesh. Explained quite loudly (for the benefit of those around) that this was a complete sham.

    The Express does have a readership, I’m afraid. It’s called Surrey 🙁

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  • Talking to my stockbroker yesterday, he observed that although the US has serious problems, the extent of those problems is becoming clearer, and the concern and uncertainty that has depressed the dollar may dissipate, causing the dollar to rise. At the same time, he senses growing concern over the UK economy, that may cause the value of sterling to fall further.

    This will further increase the price of imports, pushing inflation forward.

    In addition, I am am now getting requests for price increases from my Chinese suppliers that are huge – in one case an increase of 70% – mainly due to dramatic wage inflation among factory workers, and soaring raw material costs.

    There is clearly a lot of inflation in the pipeline, and if the BOE do cut rates further in 2008, they may well feel compelled to put them back up again before the year is out.

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  • I too am relatively new,at least to posting on the blog. I think, from my conversations with people who don’t read past what the puppet media spew out thru print and television,is that they have become so intoxicated by material wealth that the very idea or suggestion of change is unacceptable. They simply just don’t want to see what’s happening. For example, the Northern Wreck situation, in all it’s unprecedented scale is just something that happened “upt north” and has no real significance. If this had happened under a Tory government we would have had Labour’s dirt machine in full swing. To his credit Vince Cable did try his best but how many people do you know, actually have an opinion on this issue, most I work with just think I’m boring for mentioning it. If the Rock didn’t get peoples attention surely Gordon Brown’s decision to sell off half of our gold reserve would ? Nope ! Hardly anyone even noticed. Would John Major have got away so lightly ? I doubt it. So is this weak opposition, a reluctant media (or controlled) or just a public not ready to open their eyes ? We live in land where a Christmas day speech by the Queen asks us to be more considerate to the needy, yet very few seem to see the irony. I only hope as more people come to this site and others, that the real issues in this country are openly discussed,instead of this apparent apathy that has slowly installed its self.

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  • For any new members of this site, this Express Article will provide a great example of the utter BO!LO*KS that is published in the media. The only way to to know what is gfoing on is to do your own research and think for yourself (something that is becoming rare). The sad thing is that many people will read and believe this headline.

    Comments above on effect of interest rate cuts. Doesn’t matter. Look at whats happening from many different sectors of uk/global economy. Households are very heavily in debt, employment is starting to not look so great, inflation is on the up (UK, China, etc), oil prices in particular are on the up, geo-political tensions around the world, US Economy is IMHO on the slippery slope to recession (big time), GBP is on the slide, UK economy is heavily structured towards jobs that would be heavily hit by a downturn -construction and financial services. What do we do – cut IR’s to support the economy? Well this will only fuel inflation. I think we are caught in the perfect storm which is only going to end one way. The only good thing about it is that Gordon Brown will be shown up for one of the worst Chancellors in GB’s history.

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  • House prices will crash because the credit crunch is getting worse. Banks cant pass their mortgage paper onto investors anymore. No investor wants to own this paper written in the past two years because these will all have negative equity by the end of next year. It doesn’t matter if it is subprime or prime borrowers. If there is negative equity people will walk away. This is why mortgages now require higher deposits than a few months ago. Unfortunately while houses will drop so will the pound so if you have savings you really need to think of wealth preservation. In fact our money in the bank has already lost 10% since the BoE started cutting rates earlier this month. This is the first of many and the pound will lose another 25% percent of its value in my opinion when housepricescrash. I also think gold is really the only reliable money around these days but it has the disadvantage of not earning interest. On the other hand it has the advantage of being invisible to the taxman since they have relegated it to just another commodity. It is also likely to grow in value as inflation explodes next year. The Central Banks will probably succeed in sparing us a recession by letting inflation out of the bag again. This will happen to the Euro too as housing and economies go the same way as ours. This has already started in Spain. Cheap money in the past few years means all our economies are joined at the hip.

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  • Paranoia Blue says:

    Re: handle_it [comment 37]

    Yes. I agree. An interesting – yet very worrying – comment from “Thomson Financial” the other day.
    The paper said that middle class voters, and Conservative voters, are most concerned about the economic situation, while confidence remains strongest among Labour voters, and people “at the bottom of the economic scale”

    Says it all, really, – heaven help us ALL!!

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  • It terrifies me that most people will read this story over breakfast and take it at face value. If the Labour BoE do chop interest rates to try to prop the market up again, the banks will be too busy worrying about their own affairs and increasing LTV’s and dropping income multiples to save themselves. If the BoE cuts rates to 4% or even 3% it will be cold comfort for those people who can’t match the LTV requirements and remortgage to get off their 7% SVR as their intro rates come to an end. With any luck, it won’t be the only thing coming to an end…Bring on the HPC.

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  • Brown and assorted VI’s aren’t going to give up without an almighty struggle. I think we’ll see a lot more of this type of reporting as they desperately try to get people to spend, spend, spend. All the way down they’ll be claiming this month is the month the market will turn until eventually, in about 2022, they’ll be proved right and say ‘we told you!’

    Brown and the VI’s must know the game is up, what benefit they expect to extract from dragging the last few kicking and screaming into the abyss I don’t know. I suppose even if you’re four nil down in the World Cup Final with 2 minutes left on the clock you have to be seen to be trying even though the outcome is inevitable and that’s where we’re at. Brown can’t go backward, he can’t tell people the true nature of the situation or to stop spending he just has to keep moving forward doing the only thing he can think of, maintaining the illusion of a successful economy whilst hoping a miracle (or major terrorist attack) comes along to save him.

    I think it’s brilliant that anyone who types ‘house price crash’ into a search engine quickly finds this site and realises there’s many people who aren’t buying the con. Good to have you onboard and good luck over the next few years, we’re all going to need it.

    handle_it – don’t worry about those that don’t want to hear a little dose of reality. If you ask me the ‘miracle’ in Gordon’s ‘miracle economy’ is the fact he’s managed to sell so many people on the idea that being heavily in debt is the same as being wealthy. Well, they’re about to find it’s not the same and they’re going to have years to wonder what the hell happened. It’s good people are finding this site because hopefully some might be able to sort out their situation to their best advantage before the sh*t hits the fan. Many in this country are staring down the barrel of a gun and don’t even know it yet.

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  • wiltshire ~: it’s good people are finding this site because hopefully some might be able to sort out their situation to their best advantage before the sh*t hits the fan. Many in this country are staring down the barrel of a gun and don’t even know it yet.

    I have recently climbed off the ladder and have my ‘ Gordon’s miracle ‘profit’ sitting gaining interest in a British bank account. It is true that the Euro value of these savings has dropped significantly over the last months, but how much further will they drop and will the pound recover it’s lost ground against the Euro?? I could move the lot to an account in the continent,but how much further could GBP drop? (I read a FOREX prediction that could see the pound dropping to as low as 1.30 against the Euro, is this likely? what could the exchange rate be if the BoE drop rates to 4 or even 3%, when the exchange rate drops at the slightest ‘suggestion’ of a interest rate cut?)…. but if the Euro is about to drop as well…??? what to do? Anyone with any suggestions, experience, guidance.
    When it is time to climb back on the ladder I don’t want to find that my savings have been eroded completely by our ‘stable economy’ and a central bank seemingly more interested in ‘keeping up appearance’ than tackling the negative effects long term inflation will have on every household, not just the wealthy donors to the party elite.
    I am also new to this site and would like to ask another question, this one about the CPI figure. House prices have increased by an average of 10-20% a year for the last 5-10 years, but this, although well above the BoE’s stated inflation target of 2% has not caused the powers that be, except in the last year, to raise interest rates. Why, when a roof over your head is a fundamental necessity, as are food and clothes (which are included in the CPI), is this massive inflation not included in the CPI?
    Hope all this makes sense.

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  • Petrol and diesel have gone up, so has gas, electric, council tax, food, you’d think the masses would be happy something is going to drop like a stone, strange breed us Brits, bring on the crash!

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  • I am not surprised with the Express. But in reality their article will carry very little credibility… And not to forget that their readership no longer have any money and no influence.

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  • it_is_going_with_a_bang says:

    You only have to read Piers Morgan’s two books ( the guys an idiot but the books are an eye opener ) to know exactly how much spin goes on between the daily papers and the govenment and other VI’s.

    As Wiltshire said “expect more”!

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