The market rules
Finally a quiet few minutes to reflect on this morning’s events following the - appallingly early - briefing at No 10 and the usual round of media calls to follow.
So, now all the excitement is over, where are we? On the one hand, feeling pretty chipper. A few months ago, we sent out a press release detailing a series of steps we thought the Government should take. Today’s package ticks off many of those on the list. We are pleased too that our plea that the new changes should not be at expense of money earmarked for social housebuilding has been heeded.
On the other hand, if I’m honest, I am left feeling somewhat depressed by the day. There is no issue with what Government has announced (excepting the estimated £600 million on stamp duty – a high price to pay for covering your political flank). It is the scale of the crisis which sticks in my head.
One of the intriguing cameos at this morning’s briefing was carefully rehearsed duet between Gordon Brown and Alistair Darling about how much stronger the British economy was than during any of the recessions of the past few decades (Crisis? What crisis? It was almost as if the Chancellor who had spoken so gloomily about the worst economic crisis in 60 years was somebody else entirely). But that was put into perspective by the warnings from the Council for Mortgage Lenders that conditions in the market were continuing to worsen, with the risk that next year will see even fewer new mortgages approved and even more people at risk of repossessions.
As I blogged yesterday, it is perhaps beyond the powers of any Government to turn back the tide. How could they? We now live in an age of small, not big, Government presiding over a largely privatised housing system but have not really adapted our expectations of their role. This is largely a market-driven crisis. Government can act but, in the end, the market will decide.