Media is looking for bad news in the property market

From Michael Curran

We all know how attached we Britons are to home ownership and also how press and television companies love to produce copy and programmes regarding the joys and pitfalls of the one financial and lifestyle aspiration we all share.

But what is beginning to worry me is the switch in the national media’s attitude over the past few months.

Gone are the so-called ‘property pornography’ shows gleefully telling us how easy it is to make money in property. Kirsty and Phil barely appear on my screens these days and I am not sure if Sarah Beeny still helps recent graduates give up their jobs and overdevelop properties only to be saved by the property market boom.

In their place we have a large and ominous void that reminds me somewhat of the gap in programming when dotcoms fell out of favour.

Even more worryingly, following the recent announcement by the Bank of England that interest rates were to rise to what is still a relatively low level I saw two postings on personal finance websites that made me shudder and ponder carefully about the nature of self-fulfilling prophecies.

One posting was from News at Ten looking for someone who was willing to appear on the programme and “talk about the impact of today’s interest rate rise. Essentially, we are looking for someone who has a variable mortgage and will be adversely affected by the rate rise.”

Another was from an Irish-based television production company looking for people caught up in the last property crash who were willing to recount their experiences as an education for people who are part of the “overheating” Irish property market.

I fear it may be time to buckle in for a bumpy ride, ladies and gentlemen. There might be portions of the media that think it newsworthy to predict a correction in the property market.

I recently saw one pundit gleefully predicting rates of 5.5% and problems for some home owners by this time next year. Nobody mentioned other sources that expect interest rates to end next year at 4.75%, and only one that I saw mentioned that the effect of inflation can be positive rather than always negative.

In my humble opinion, now is the time to ensure that all our client files are in order and that reasons why letters include affordability calculations and warnings, especially where multiples of 4 x income are being used.

Let’s prepare ourselves and our clients for a time when interest rates may be higher and property prices lower. Whether we believe it will happen or not there are plenty of claims firms out there who will insist that we knew all along and continued to recklessly sell unaffordable mortgages that were not appropriate.

I do not want to be seen as a doom-monger. I actually feel confident about the future of our profession, but just think we have to be prepared for the property market to lose the support of the wider media and make sure that, if this does become a selffulfilling prophecy, we and our clients are better prepared than some may like them to be.

Michael Curran
Independent mortgage adviser
About Mortgages
Anlaby
Hull