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The former BBC economics editor Evan Davis said yesterday that journalists could have done more to warn the public about the credit crunch that triggered the current housing price crash and general financial turmoil.

Davis, now a presenter on BBC Radio 4's Today, said the media may have helped to drive up the market by over-reporting statistics on rising house prices in the runup to the credit crunch crisis.

"I do ask whether we did our best to warn people of impending problems during the upswing of the [economic] cycle," Davis said at the Radio Festival in Glasgow yesterday.

"My line is, 'My God, we tried', but when everything is going well people don't want to hear it. We suffered from giving warnings a bit too early in the whole cycle.

"If, like me, you were saying in 2002-03, 'Remember folks, house prices can go down as well as up', by 2005 that warning was beginning to lose a bit of credibility," he added.

"We did warn them but didn't warn sufficiently loudly or clearly, and might have warned a little too early."

Davis, who was interviewed by his BBC colleague Jeremy Vine in Glasgow, said the media may also have helped inflate the market by reporting on every new house price survey - even when several of them were coming out in the same week.

"There was a period when online - not just online and not just the BBC - when house price stories were very interesting," he added.

"If you report the same thing five times then it sounds like they are going up even more. We in the end drive these things up just as the media did in the dotcom boom."

Read more in Guardian Housing news

Labels: Evan Davis, House market, property analysis, property boom, property prices, uk housing

Taking the temperature of the property market can be a tricky but when estate agents talk of a buyers' market those hoping to bag a good deal should listen up.

With agents dropping prices, auctioneers setting lower reserves and a slump in property confidence taking hold, buyers are now firmly in the driving seat

Experts agree the heat has gone from the property market, after two robust years of price rises following the mini-slowdown of 2005.

The National Association of Estate Agents reported just five homes per agent were sold on average in December 2007, compared to eight per agent in December 2006.

Putting a positive spin on the slowdown, it said: 'For those choosing to enter the market now, there is plenty of opportunity.'

However, if buyers can purchase without over reaching themselves and are willing to accept their asset may dip in value, the upcoming months represent an opportunity to test a soft market and perhaps bag a bargain home.

Full article continues at thisismoney.com

Labels: House market, property boom, thisismoney

RECENT DAYS have witnessed some extraordinary developments, most of them from the Bank of England. Time was when months would go by without a peep from the Old Lady. Now it has become a news-generating machine that Max Clifford would be proud of.

Development one was Mervyn King’s attack on the City’s reward culture, which many will applaud, though some would say a bit of performance-related incentive is a good thing. The governor’s salary of just under £282,000 — small in relation to many City salaries though with a pension pot of nearly £4m — rises 2% a year, come what may. That gives him an incentive to keep inflation on target but doesn’t reward or punish him beyond that.

Development two was a speech by David “Danny” Blanchflower, one of King’s colleagues on the Bank’s monetary policy committee (MPC). This was, it is safe to say, the most doom-laden speech ever from a UK policymaker, warning that Britain was likely to follow America into recession (whether the US is in recession is still open for debate after first-quarter numbers showed growth), that a fall in house prices of a third in two to three years “does not seem implausible” and the risk of something “horrible” arising from the credit crunch was significant.

Compared with the coded language normally adopted by anybody with anything to do with the Bank, this was a revelation. Blanchflower spends half his time in America and that may explain his gloom, but even there central bankers are a bit more guarded in their language. I am surprised this one got past the censors.

“Developments in the UK are starting to look eerily similar to those in the US six months or so ago,” he said. “There has been no decoupling of the two economies: contagion is in the air. The US sneezed and the UK is rapidly catching its cold.” I’ll return to that.

Development three, hard on the heels of this blood-curdling warning, was the apparent declaration from the Bank that the credit crisis was over and that banks should come out of their shells and start lending again.

This was not quite what its financial stability report was saying: that some gloom in financial markets may have been overdone, in that the scale of losses assumed in US sub-prime assets, a 40% default, looks too pessimistic. Financial markets are assuming many such assets are worth nothing, while on conservative assumptions, and allowing for further falls in American house prices, they are worth something.

Article continues at TimesOnline

Labels: Bank of England, House market, Mervyn King, property boom