With over 4m viewers tuning into Location, Location, Location each week and repeats now running on arguably too many satellite channels it’s pretty clear that the public has a huge interest in what goes on in the property market. As liquidity problems in the financial markets almost completely dissipated the choice of mortgage products, the numbers of transactions halved and house prices bombed – there were accusations from all sides that the media was being overly pessimistic. Many blamed newspapers and TV property shows for the hype behind the boom, for the dire state of the market at the time and then for exaggeration and for making things far worse than they already were. Appeals where made from within the property industry for the media to start to talk the market up.
I would certainly hope that if anyone thought that a return to a healthy economy, sensible lending and gradually rising house prices was in my gift – would appreciate that I, more than many, would have good reason to get on my soap box. To my great cost and regret, the buying agency business that I founded and ran in conjunction with my TV work, failed alongside many other previously successful, ambitious and expanding agency businesses. The media and newspapers in particular have a duty to report these kind of events, despite the discomfort that can result for those affected.
Now, with the benefit of hindsight, its easy to admit in our heart of hearts, we knew there was an elephant in the corner of the room. The boom had to finish sometime, 120% mortgages never made sense, just as trees do not continue growing up to the sky – prices do not climb forever. The bubble had to pop one day – and the longer it didn’t – only meant the greater the pressure and the bigger the explosion when it did. I’m not convinced even the elephant itself appreciated quite how catastrophic the consequences of being ignored would turn out to be. Moral of the story = always be polite and say hello to elephants!
A full 12 months have now passed since, what for many of us, was the defining moment – the collapse of Lehman Brothers. The writing was on the wall from that point on. We all know that sensational headlines relating to our homes and most treasured assets help to sell newspapers and in the last quarter of 2008 a rolling 24 hour news cycle always had time to report the latest house price falls and woefall predictions for the future. The statistics were scary and, whilst journalists attempt to maintain balance, they did need to inform all those millions of people connected to the housing market that values were falling rapidly, that the chance of selling was drifting out from 1 in 10 and that the mortgage market had all but evaporated.
While we may be accustomed to subjective opinion in the news, the statistics in the copious reports, surveys and indexes purported to reveal the facts – facts they are indeed. However, and this is the nub of the issue, without an understanding of the methodology behind each set of numbers and a clear idea of how they were collated, together with their relevance to your circumstances and what it is you’re trying to find out…the information can be of fairly limited use. Why is that? There are numerous different price points and stages along the whole buying / selling process – that are all used to report on what is happening to house prices that particular month. Of course volatile market conditions make the differences in the way they all work – very much more important – and very much more confusing. Yes, of course the statistics can be useful – but you need a combination of them and a very clear idea of the methodology used to calculate each. Much would be achieved if more buyers and sellers were able to appreciate this.
Like any commodity, the housing market is hugely influenced by consumer confidence and over the course of a few months at the end of last year, this was almost entirely dissolved. Rather than causing this, professionals and pundits alike needed our clients to understand this was happening and to prepare themselves. While many in the industry were happy to applaud the Kings new cloths, there were some who could see that his Royal Highness had a serious wardrobe malfunction.
A year later and, at last, conditions in the London market feel familiar again. They will never actually BE the same again (and neither should we wish them to be) but when stability turns into growth then the media should and will report it. Fairly and dispassionately. As houses mean so much more than roofs over peoples heads – it would be irresponsible to talk the market down now just as it proved so expensive for all those who heard the market being talked up two years ago.