London Centric Property Journalists and the Regurgitating of Press Releases
David Lawrenson of LettingFocus takes issue with journalists over the way they report on the housing market and on mortgage rates.
I get very irritated with what is often very London-centric journalism in the national papers and the regurgitating of press releases.
London Centric Property Journalism
If you read the national press and many London based property websites, you could be forgiven for thinking that house prices and rents have been rocketing everywhere.
But the fact is, they haven’t.
House prices are not up everywhere. In fact, as some charts from Savills show, (see end of this post for link), it is only in London and a few places very near the capital where house prices are higher than they were ten years ago, once the effect of general inflation has been taken into account.
Of course, all statistics can be potentially misleading. In the case of any time series based data showing property prices, one big way the result can be skewed is where the mix of property types in an area changes over time. So, if there has either been a lot more upmarket houses built or a load of cheap, low quality flats delivered, the pattern of property prices in that areas is skewed. In other words, if you compare property prices over time for such an area, you will not be comparing like with like.
As I have said here before, lots of other evidence shows that houses, especially in cities, have far outperformed flats over the last 10 and 20 years. This is because houses (which usually come with a garden, of course) have become in ever shorter supply, because whatever land becomes available is usually used to build blocks of flats, (which give developers more profit). So, if lots of flats have been built in an area, the headline property price growth over ten years may greatly underestimate the price changes of houses there, possibly by a huge factor.
Regurgitating of Press Releases on Mortgage Rates
The other thing that bugs me is the mindless regurgitating of press releases that you see too often, even in the up-market press.
A particular irritation of mine is when a journalist tells us how great a new mortgage rate is but omits to tell us what the fee is. And they almost never mention what the lenders “follow on” mortgage rate is, (the so called standard variable rate you pay after the special discount or fixed period has ended).
Some mortgage lenders have always had dreadful standard variable rates.
It is time journalists started naming and shaming them instead of slavishly regurgitating the lenders’ press releases to the public.
We know there are some very good journalists out there. But there are others who need to try harder, think outside the London mind set, ask more questions of statistics and of the companies feeding them press releases.
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Note: Here is the link to those charts, reproduced in the Daily Telegraph, (which at least shows that some London journalists do understand what is really happening outside the M25).
As you can see, the only areas where property prices are up in real terms over 10 years are all of London (except for three outer NE boroughs and Bromley). Also, all of Surrey, the bit of Berkshire around Maidenhead and Windsor and finally, Brighton. Everywhere else in the whole of Great Britain they are lower: