CITY AND SUBURBAN
Good news for Rupert and Samantha is moving the market in houses money
CHRISTOPHER FILDES
With the tuneless persistence of an early cuckoo, estate agents promise me that the buyers are back. 'Dear Occupier,' they write chummily, 'we have international bankers/rich Arabs/Hong Kong buyers on our books who are desperate to buy a house just like yours. Interested? Then ring Rupert or Samantha on. . . . 9 Reality has never stopped Rupert and Samantha from chirruping to keep the market's spirits up, but this year they might almost be right. I was arguing as long ago as August that if the Chancellor wanted to stimulate the market there were two things he could do. One was to let prices fall to levels where, in relation to incomes, they were on the low side, and the other was to set off a raging price war among mortgage lenders: 'Albeit by mis- take, the Chancellor has done both of these already.' Ever since then, house prices have been creeping up, but the price war rages unabated. There are more mortgage lenders, with more capital and more head offices and chief executives, than the traffic will support. The Woolwich has found costs to cut, but it is the Nationwide, trying to demonstrate that building societies still have a future, that has now cut mortgage rates to the lowest level since the days of Harold Wilson's first government. Money moves markets, and money is moving the market in houses along. What Rupert and Samantha would like us to believe is that good times are just around the corner, coming out (con- veniently) just in time for the election. The mistake would be to believe that the house market will go back to its old ways, when you could make money by borrowing more of it than you could afford, buying a house with it, moving in and putting your feet up. History will add this to the list of great mar- ket delusions, like the black tulip boom and even black tulips were a more convinc- ing business proposition.
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