Let’s Get Back to Normal

The Financial Services Authority has come up with a novel idea — banks should make sure that people who take out loans and mortgages should be able to pay them back! We have to hope that sanity breaks out and these proposals are rejected as it would mean turning off the principal means of growth in the economy for the past several years — people being able to borrow money they can’t pay back all based on an unsustainable inflationary rise in house prices that is purely speculative.

Some idiot estate agent type was on the radio bemoaning the FSA’s extinguishing the green shoots in the housing market by these proposals as he’d been cautiously optimistic that things were returning to normal. Doesn’t he realise that ‘normal’ got us (or, more precisely, people who haven’t received massive bonuses underwritten by Gordon Brown this year) into this mess in the first place.

Why is it that every idiot journalist who presents a radio or TV story on house prices starts from the presumption that rising house prices are an indisputably good thing? Don’t they realise that people buy as well as sell houses and that, strangely enough, people who sell their houses tend to need to buy another to move into. Rapidly rising prices make things more expensive in absolute terms for anyone who isn’t downsizing into a smaller property — as well as destroying the market as a whole by barring new entrants. The only people who gain unreservedly are people who stand to inherit some massive house in an expensive area  — and who can’t wait for the occupants to die. Funnily enough, this sounds like the sort of demographic group (ageing spoiled rich brats) who tend to write these ‘good news, house price inflation is rampant’ stories in the media so maybe they’re acting in their best interests after all?

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