For example, former work and pensions secretary David Blunkett has warned that people will have to work longer to pay for their retirement and must make greater use of equity release. He says we should question the notion of protecting inheritance while expecting the state to provide for us when we have failed to prepare.
But Conservative shadow pensions minister Nigel Waterson has accused Blunkett of trying to justify the government’s failure to protect pensioners’ living standards and says his emphasis on equity release penalises middle class home owners who have been prudent throughout their working lives.
Not surprisingly, Key Retirement Solutions’ Terry Pritchard said: “Blunkett’s comments are the best PR we could have hoped for.”
Then we have those apparently on the same side expressing conflicting but not necessarily incorrect views.
Prime Minister Gordon Brown recently tried to restore confidence in the economy by claiming there are grounds to be “cautiously optimistic”. Brown claimed the UK was better placed to deal with the credit crunch than during any other period of financial turbulence. He was trying to reassure voters after chancellor Alistair Darling claimed that economic conditions are “arguably the worst they have been in 60 years”, sparking a fall in the value of sterling.
I also find it interesting how statistics can be manipulated and interpreted in different ways. For example, take Halifax’s house price index. John Charcol’s Ray Boulger took a pop at the consumer media recently for being opportunistic when interpreting Halifax’s figures.
The lender reported an annual house price fall of 10.9%, calculated by taking quarterly averages and comparing them with corresponding figures from last year. However, some media chose to calculate the percentage change from August to August, creating an annual fall of 12.7%.
A Halifax spokesman stepped in and said that the latter approach leads to erratic figures and that “our method gives a better picture of underlying trends”.
Boulger pointed out that the bigger the number, the better the news and defended the Halifax method, but then went on to say that he prefers Nationwide’s index because Halifax numbers are “seasonally adjusted or, as I like to call them, doctored”.
But there are some things we all must agree on, or at least the majority of us. Take the mortgage industry being united behind demands for more help from the government with liquidity. We can tinker all we like with stamp duty incentives and 0.25% Bank of England base rate cuts but the writing is on the wall – without more help with funding the market will not make a significant recovery.
Trade bodies are as one, with the Council of Mortgage Lenders, Association of Mortgage Intermediaries, Royal Institution of Chartered Surveyors and Intermediary Mortgage Lenders Association all urging the government to kick-start the securitisation market.
The CML has written to the chancellor reminding him of the importance of intervention.
CML director-general Michael Coo-gan wrote: ‘We see funding problems in the mortgage market as a fundamental bar to meaningful housing recovery.’
We will probably have to wait until the pre-Budget report for any real initiatives, although some commentators believe the pressure is on the Prime Minister to take fast, decisive action.
Perhaps he will time an announcement to coincide with the Tory party conference, especially given the cool reception his £1bn housing rescue package received in early September.
It would be nice to see serious support in the form of Debt Management Office Treasury bills being swapped for lenders’ AAA-rated residential mortgage backed securities, which are highly tradable and could rejuvenate the interbank trading market. This would be a low-risk option for the government.
But when I said the majority of us want to see more help from the government to alleviate the liquidity crisis, I deliberately didn’t mean to imply that everyone agrees with this view.
Take industry commentator and journalist Andrew Hazell. He thinks the housing market is overheated and prices need to fall. He believes the government should resist intervening and let prices find their own level.
And consultant and freelance journalist Kevin O’Donnell takes the view that the 10% house price reduction we have seen in the past year has done little to dent affordability, which has de-clined hugely over the past decade.
He believes we will need to see a 25% reduction in prices before any meaningful pick-up in property sales occurs.
Differing opinions make for lively debate that hopefully leads to solutions. When and how is anyone’s guess, but they can’t all be right, can they?