'Peddling a crash?', Sky News Online

Tuesday, July 22, 2008

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Is The Media Marketing House Price Doom? By James Silver

The headlines have become a daily diet of property market doom and gloom. In the past few days alone, the dire news has come thick and fast.

The Daily Mail warned that "House prices [are] falling at their fastest rate for 50 years", The Times that "Estate agents report lowest level of home sales in 30 years", while the even gloomier Guardian that: "Property sales slump to lowest level ever recorded".

All grim stuff. No wonder then, that home-owners and prospective buyers are jittery, estate agents around the country are shutting up shop and building firms are mothballing projects as finance dries up.

In fact, there have been 3,000 articles in the British national press containing the words "house prices" and "fall" since the start of the year - and that's not including local newspapers and other media.

The media is not just pulling these stories out of thin air - they are based on surveys and statistics from the housing industry.

But are they actually making the situation worse by concentrating too much on the negative aspects of the situation, and ignoring the positive?

One who believes they are is Peter Bolton King, chief executive of the National Association of Estate Agents.

He says such stories have "a tremendous effect".

"We generally have not got a housing market crisis at the moment," he claims. "There's no let-up in demand, a lot of people still want to move. We know there's a credit problem, however there are still mortgages out there for people who've got a deposit and are prepared to hunt around.

"I'd say the number one problem at the moment is that we're in a confidence crisis. If you wake up every morning to read that house prices and transactions are plummeting, it all creates a feeling of nervousness.

"The feedback I get from our members is that they can tell when there's a negative story about the housing market in the papers that day, because they get fewer calls and people through the door."

He declares, with more than a hint of exasperation: "And I get umpteen emails a day asking what I'm going to do to stop these stupid headlines."

Unsurprisingly, the view that the media is at least partly to blame for the "confidence crisis" in the market finds resonance elsewhere in the industry.

"The media plays a considerable role both in upturns and downturns," argues Miles Shipside, commercial director of Rightmove.co.uk - which bills itself as the UK's number one property website.

"In the 1990s downturn, when there wasn't 24-hour media and the internet, people still bought properties even though the prices were going down.

"Now there appears to be a very drastic drop in transaction volumes which is obviously driven by people's awareness of the media coverage. They're thinking well if prices are falling, why should I buy now if property is going to get cheaper?

"[The negative coverage] leads some buyers who have agreed deals to pull out or renegotiate, and others to move into rented accommodation, because they've got the jitters."

Overall, Mr Shipside considers the media coverage of the property market to be over the top. "Even sensible papers like the Daily Telegraph are being too dramatic," he says.

So how much responsibility should the media shoulder for the current climate?

"There's no doubt that all those 'doom and gloom' headlines earlier this year affected sentiment and undermined confidence," says Paul Tabor, managing director of Garrington Homefinders.

"But I do think the negative stories have less of an effect now because everyone is aware of how bad the situation is.

"Thanks to the mortgage drought, the bottom rung of the property ladder has effectively been removed and with stamp duty crippling the few remaining first time buyers, silver linings are hard to find. So, right now, [the coverage] is reflecting the [street-level] reality."

However, Giles Barrie, editor of Property Week, thinks blaming the media at all for the state of the property market is "a joke".

"That kind of attitude [to the media] is just head-in-the-sand rubbish. There is nothing the media can do to influence what is a global economic crisis.

"And frankly it's just as well that the press is telling it as it is because people who are trying to buy a house need to know what's really going on out there. That's responsible journalism."

Nor does Barrie have any time for the suggestion that many newspapers, and TV news programmes, put a "dramatic" spin on property stories.

"I would say mortgage approvals at their lowest since records began is a pretty dramatic story in itself, so there's no need for spin."

He adds: "Do [those who criticize the press coverage] really think there wouldn't be a housing market crisis if journalists weren't writing about it?"

Posted by James Silver - On Tuesday, July 22, 2008

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