There are lies, damned lies and house price statistics.
The announcement from the Halifax that prices had slumped 1.5 per cent was greeted by headline's screaming that the "shock" fall was a sign that another house price crash was under way. But the Halifax was just one survey. It was preceded by one from the Nationwide that showed a much smaller fall and the Land Registry announcing there was a bigger one. These surveys are great grist to the journalistic mill but how accurate are they?
The Halifax is in my view much more robust than the Nationwide, which is rushed out first and is the poorer for it. The Land Registry used to be the benchmark but has now become a very strange statistical concoction based around the idea of repeat sales regression (Catchy isn't it?). This involves comparing the price of properties sold now with the price paid when it was sold before. There is also a time lag as it's based on completions. We then have the survey from the Royal Institution of Chartered Surveyors, which takes the temperature of the market by asking 300 agents if they are seeing prices rise or fall. A similar methodology is used by the websites Hometrack and Rightmove.
The virtue of the Halifax survey is that its figures are based on the agreed price rather than the asking price. But a big downer is that it excludes cash sales. Normally that isn't a problem but in these mortgage-starved times cash sales actually account for a third of transactions – double the pre-credit crunch level.
So what to make of these "shock" moves in prices? On a monthly basis, very little. Historically, monthly house price figures are very volatile. What is a lot better guide are the three-monthly figures, which if you apply to the Halifax actually works out as a "'shock" 1.8 per cent rise over the past three months.
Inheritance tax dead-weight
The narrowing of the opinion polls has come as no surprise. I come from Chester, a crucial marginal seat. Historically, whoever wins the seat forms the government and recent visits home confirmed the Tories are in trouble outside their South-east stronghold. Although Labour are criminally incompetent with public money, voters have looked at George Osborne and concluded that he hasn't got the gravitas for the job of managing the economy. Worse, they dismiss him as nothing better than Harry Enfield's Tory Boy character.
Although this is glib, he may be one of those politicians who you can promote to high office when you're in power but not when you're trying to gain power. The malaise ties into the idea that Tory policy is "dreamed up on the playing fields of Eton", which seems to have had a real resonance with the voters. Ironically it's due to Margaret Thatcher's revolution that we stopped looking to the products of public schools for leadership, and although the Tories have become more diverse in their candidate selection there are a lot of toffs in the middle and at the top.
The Cameron project feels to many, particuarly in the North, like a big London PR job dreamed up in Notting Hill wine bars. And they have a point. I don't give two figs for class but many Britons do. And the idea of the same old Tory toffs is serially reinforced by the party's inheritance tax policy. Raising thresholds to a million quid was a great stroke when it helped see off the election that never was. But more than two years on and hands up anyone whose biggest worry is an easily avoidable IHT charge after they die? Pardon the pun, but it's a dead issue. The money earmarked for this could be shunted into a further savings tax break – a gesture to the many aspirants rather than the few.
Some of the policies outlined by the Tories on personal finances do have a lot going for them: I'm thinking about scrapping compulsory annuitisation of pensions. The Tories are never going to do genuine redistribution from rich to poor but what about a bit of Thatcherite transfer to those just above the average wage, to act as a spur to work harder through the inevitably dire fiscal times to come? There's an idea dreamed up in middle England.
Save money: buy a banger
I may be tarred and feathered by the resident environmentalists at The Independent on Sunday for saying this but I'm a big fan of running an older car. They are far easier and much cheaper to service and repair (any car that needs a laptop for servicing is a no-no); you are not tied into the rip-off main dealer network, and older cars are much, much cheaper to insure.
These days cars more than five years old are considered bangers by the trade and go for next to nothing. Even from an environmental view I'm told it's often better to keep an older car on the road than cause a new one to be built.
It seems, though, that I'm not alone at the IoS in my penchant for older cars. James Ruppert, who writes for the motoring section (and is far more qualified than me to go on about these things), has just published the Bangernomics Bible: Buy and Run a Car for Less which sets out the case for why we should all be driving old rather than new. Think about that next time you drive by another broken-down new car on the hard shoulder waiting to be towed to the expensive dealer garage.Reuse content