Safe as houses

If a man empties his purse into his head no one can take it away from him. An investment in knowledge always pays the best interest.

One of the best phrases I’ve ever seen in a press release landed on my desk this morning.

Purportedly from the director of an online estate agency (or their PR company), the line described the fact that house prices have stalled for the second month in a row as akin to “the addition of a pair of furry dice to a Saturn V rocket” – ie. a slight incumberence but nothing that won’t stop house prices continuing off into the stratosphere.

I just love that image.

However, delightful though it is, it is precisely the reason why The Telegraph last week carried a report that a economic think tank is urging the Government to rein in Help to Buy, lest it succeed too well and leave us in exactly the precarious situation we were in seven years ago.

The Organisation for Economic Cooperation and Development made its pronouncement that the Bank of England should step in and increase the size of deposit required for house purchasing after the Bank itself suggested the rocketing housing market was the biggest threat to our financial stability.

Two things occur to me here: one, that it seems completely bonkers that we should have gone through all that hurt and pain, only for someone to say that we need to hold back on things now – rather like the doctor saying that the patient is recovering too well and withholding the painkillers, and two, that it has always been the case that the housing market is the biggest threat to our financial stability.

We are so wedded to the thought that our home is our proverbial castle in this country that when we see the headlines about house prices rising, we feel rich and when we see the reverse news stories, we feel poor. Unless, that is, you are someone who is trying to get onto the property ladder in the first place, in which case you will be feeling pretty poor whatever happens if prices continue to rise.

As usual though, there is a mixed picture across the country. There are bubbles as there always are. London is a different story entirely and the south east benefits (or suffers, depending on your point of view) from its easy access to the capital.

In the last few days, the papers have also carried stories of potential purchasers ‘panic-buying’ which I suppose means rushing in and making offers on properties without proper care and attention.

That is really not a sensible way to approach your biggest financial commitment to which those of us who remember the rush to beat the double-mortgage-tax-relief deadline in 1988 and its disastrous aftermath can testify.

Of course, the other thing to remember about house prices, whether they are rising or falling, is that they make for good headlines and good headlines are what gets papers sold and websites clicked on.

About Fiona Russell-Horne

Group Managing Editor across the BMJ portfolio.

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