Posts tagged as house prices

02 Oct 2005

House prices: the message is in the level, not the rate of change

I sent this letter to the FT, not necessarily to be published but to provoke some policy thinking about how to report conditions in the housing market. The typical focus on changes in the rate of change in nominal house prices is not a substitute for a compass of long term house price levels stripped of the ‘money illusion’ that distorts all long term UK data. Financial writers should be helping us to see the wood as well as the trees.

read more Commentary by Stuart Fowler
23 Apr 2005

Affordable mortgages for key workers

Stability Brown has come up with a new tweak for a market that’s misbehaving. It seems that in 9 out of 10 major cities key public sector workers can’t afford to buy homes. His big idea is to encourage lenders to provide shared mortgages with the Government (us, actually) underwriting part of the equity risk.

read more Commentary by Stuart Fowler
07 Mar 2005

What parents tell the children about property

Parents have instilled in their children the desire to get onto the property ladder, not just as a lifestyle choice but as a way to avoid permanent loss of possible wealth. But the expected economic rewards of home ownership are misunderstood by most parents, biased by the experience of their generation. Tell most people what the long term trend of house prices has been ‘in real terms’, after stripping away the illusion of general inflation, and they will stare at you in disbelief. But unless you believe the real trend of growth will be above the real cost of mortgage debt, there will be a high financial price and loss of flexibility on that ladder. Lifestyle benefits may make it worth a high price but, like work/play or pay/satisfaction choices, that’s for kids to decide.

read more Commentary by Stuart Fowler
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