It is Obvious

Chris Rick has got altogether too much to say

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Posted by chrisrick13 on August 30, 2011

It is obvious: it is easy to sell newspapers

Step forward the headline writers of the Daily Express.  Today just about all that they could squeeze onto the front page of the paper was the headline: House prices to rise by 21% over next five years.

I might try for something equally as significant: the sun will rise in the east tomorrow.

Given that there are a lot of people out there trying to predict this sort of thing and can’t get it right when they are predicting tomorrow, I wonder where they get their certainty from over such a huge timescale.  The implication though was that it was good news.

So investigate the numbers a little more.  Inflation is at 4.5% if I choose the governments preferred measure that does not include housing costs, will it be higher or lower over the next 5 years?  Assume the same.  Then over that period the value of money will have decreased by 24.5%.  Not such a catchy headline is it: Value of your house to drop in real terms by 3.5% over next five years.  If you add in repairs, maintenance, insurance and council tax then you could put in a sub-heading: And you need to spend £16,000 over that time for an average house to keep it in decent shape.

What prompted this big headline?  I am not going to read the Express to try and find out.  If I was a conspiracy theorist then I would say it was some vested interest trying to keep confidence in the housing market high.

It is obvious: it is easy to sell newspapers – just shout loud, content is irrelevant

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