Does vigorous talk and the inference of interest rate rises really presage them
Monday, August 10, 2015 by Ed Mead
Ever since Mark Carney took over at the Bank of England there seems to have been a skunkworks operation in play. Inference seeks to influence reporting and statistics and the Chancellor seems to have joined in – sometimes not so subtly. The mission: to maintain some sort of control over the housing market. Political promises and economic reality have combined to produce a seeming flip-flop of policies and statements that leave the market in a quandary. Because many of these emissions are briefings their contents often leave those potentially affected in confusion, particularly unhelpful at a time when concrete news of any sort is palpably lacking.
Potentially impinging most heavily is the latest talk of rates rising by the end of the year - really?
If there’s anyone out there who seriously feels our Economy is back on its feet or that we’re ready to give a signal that we’re on the way to normality I’ve yet to be persuaded by them.
The obsession with pulling levers to control prices by tinkering with demand has unintended consequences and given the contribution of UK Property PLC to the total take what’s happening in Prime Central London at the moment should serve as a timely warning.
Whilst it’s too early to sound the death knell for PCL the market that drives London is running out of oil. That’s not a grotesque pun on middle eastern money, but a lament on Conservative obsession with curtailing the perceived sale of prime real estate to foreigners. This has led to a set of draconian costs, TORY born and released from the skunkworks at times of maximum obfuscation, like when everyone was distracted talking about mansion tax. These overbearing measures are right now squeezing the last drops out of a vibrant a dynamic market.
The underground generals looking for PR opportunities to affect sentiment must be made to understand that IF they created a full-blown open debate on supplying and building more homes many of those struggling to overstretch themselves and get on the housing ladder might be prepared to wait and ease the pressure.