By Michael Baxter
It’s been a busy few days for news on the UK housing market.
Last month, something rare happened. Hometrack, Nationwide, and Halifax were in agreement. Well, prices can either go up or down. Strictly speaking the odds that the three of them might agree are one in four.
In practise, it seems that they agree with each other far less often than that. But in July, all three had prices falling. Was that significant? Only August would tell.
So far this month we have had housing reports from two of them. Hometrack had prices falling by 0.1 per cent, and said the market was fragile. Nationwide had them rising by 1.3 per cent, the biggest monthly jump recorded since January 2010, and said the market was stable. Perhaps more significantly, Hometrack recorded the third successive month of falling demand, while it had supply rising.
More significant still was the reaction of the media. It does not take much to get the ‘Daily Express’ plastering news of rising house prices on its cover, and so this was what happened last week. Back in early 2008, one housing report recorded a month on month fall in house prices, but still had annual prices rising. There was nothing odd about this. As you know, 12 months of data makes up annual figures. And once month on month prices start falling it takes time before such falls show up in the annual data. And yet, there we were in the early stages of one almighty recession, house prices were seeing steep month on month falls, and the ‘Daily Express’ chose to lead with the fact that house prices were still going up on an annual basis. It was an extraordinary piece of journalism.
The truth is, however, that the editor of the ‘Express’ was merely trying to sell copies of the esteemed bastion of objectivity. This rather strange interpretation of the statistics really told us more about what the British public thought was important than anything else. For too long the UK relied on rising house prices to promote borrowing to fund spending to create growth. The fact that four years on, in 2012, the ‘Express’ still sees fit to lead with stories talking up house prices based on the flimsiest of evidence shows how little we have moved forward.
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