Not waving but drowning?

The surest way to ruin a man who doesn’t know how to handle money is to give him some.

So that nice Lord Mandelson has reached into his (our, actually) pockets and brought out a little something to help the poor beleaguered car industry out.

Well, that’s the banks and the car industry taken care of with our money, how about something to sort out the building industry? Yes, I know Mrs Beckett has ploughing been a lot of public money into getting the housebuilders building again and ensuring that there is money for social housing but, lets face it, it’s not working and it won’t work for a very long time.

According to a report from the Nationwide today, there has been a ‘breakdown’ between housing enquiries from potential buyers and mortgage approvals. You don’t say.

House prices, which are just one of the ways in which the general populous judges its relative wealth, are down by an average 16% and are staying down. It doesn’t matter that the interest rates being charged are affordably low, if you can’t get the mortgage approval because you don’t have a 30% or 40% deposit or because you once forgot to pay your Visa bill for a month, then it’s immaterial.

There may well be a surge of enquiries from potential house purchasers but they will probably all have one thing in common – they’ve got a nose for a bargain. If the media is full of news about how low house prices have fallen and have still to fall, anyone with an ounce of sense is going to approach a sale with the idea that the asking price is a starting point and are likely to play hard-ball.

If sellers are equally determined to stick to their guns then we will continue to have the sort of impasse we’ve been seeing in the last few months with few, if any, property transactions coming through.

Still, one thing that is proving good news for merchants is the improve-if-you-can’t-move brigade. Anyone who can afford to fund improvements without having to go cap in hand to the bank is doing so and lots of little jobs add up.

Survival over the next 12 months or so is going to be about doing everything possible to make sure that what business there is comes your way rather than your competitors’.

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About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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