Word on the street: buy now, pay later?
(Filed: 04/04/2004)
www.telegraph.co.uk/prope...ght01.html
Is Gordon Brown pumping the market into a frenzy to put off the downturn until after the election? House Rat investigates
In recent weeks, press releases put out by estate agents have been verging on triumphal. No longer are they gingerly telling us that "good houses at the right price will always sell".
One issued last week by a buying agent wanted to wallow in the discomfort of the "self-satisfied uber-bear" who this time last year was holding forth at dinner parties about having moved into rented accommodation and was "predicting a crash of apocalyptic proportions and boasting about his hoard of gold bullion".
Those who sell property are clearly enjoying themselves - even those who operate at the top of the London market and who had been subdued ever since the summer of 2001. But why is the market so buoyant, with interest rates rising and first-time buyers all but driven to extinction?
For the latest bout of property-price inflation, credit belongs to the Chancellor. Never mind the Barker Report, which is supposed to put right the shortage of new homes: it will be years before the extra new housing is built.
What is the Government doing to abate house-price inflation in the shorter term? So little that one wonders whether Gordon Brown is deliberately trying to pump the housing market into one last frenzy to postpone the inevitable downturn until after the election.
He started by replacing one inflation index, RPIX, which includes a moderate input from house prices, with another, the Index of Consumer Prices, which excludes all housing costs.
By this deft manoeuvre, he effectively tied the Bank of England's hands and ensured that buyers still have access to cheap money - for now. The Government is also boosting inflation directly by grants of up to 100,000 to help public sector "key workers" buy property in the expensive South East.
Moreover, the Chancellor is planning to avert a collapse in the buy-to-let market by giving property investors a tax break in the form of American-style real estate investment trusts.
"What happened when they were launched in America is that trusts bought whole blocks of 120 apartments, off-plan," one developer told me last week.
The Chancellor's various schemes won't prop up the housing market forever, but Mr Brown may be confident that no voter will go into the polling booths next May suffering from negative equity.
(Filed: 04/04/2004)
www.telegraph.co.uk/prope...ght01.html
Is Gordon Brown pumping the market into a frenzy to put off the downturn until after the election? House Rat investigates
In recent weeks, press releases put out by estate agents have been verging on triumphal. No longer are they gingerly telling us that "good houses at the right price will always sell".
One issued last week by a buying agent wanted to wallow in the discomfort of the "self-satisfied uber-bear" who this time last year was holding forth at dinner parties about having moved into rented accommodation and was "predicting a crash of apocalyptic proportions and boasting about his hoard of gold bullion".
Those who sell property are clearly enjoying themselves - even those who operate at the top of the London market and who had been subdued ever since the summer of 2001. But why is the market so buoyant, with interest rates rising and first-time buyers all but driven to extinction?
For the latest bout of property-price inflation, credit belongs to the Chancellor. Never mind the Barker Report, which is supposed to put right the shortage of new homes: it will be years before the extra new housing is built.
What is the Government doing to abate house-price inflation in the shorter term? So little that one wonders whether Gordon Brown is deliberately trying to pump the housing market into one last frenzy to postpone the inevitable downturn until after the election.
He started by replacing one inflation index, RPIX, which includes a moderate input from house prices, with another, the Index of Consumer Prices, which excludes all housing costs.
By this deft manoeuvre, he effectively tied the Bank of England's hands and ensured that buyers still have access to cheap money - for now. The Government is also boosting inflation directly by grants of up to 100,000 to help public sector "key workers" buy property in the expensive South East.
Moreover, the Chancellor is planning to avert a collapse in the buy-to-let market by giving property investors a tax break in the form of American-style real estate investment trusts.
"What happened when they were launched in America is that trusts bought whole blocks of 120 apartments, off-plan," one developer told me last week.
The Chancellor's various schemes won't prop up the housing market forever, but Mr Brown may be confident that no voter will go into the polling booths next May suffering from negative equity.
