When it’s a housing bubble of course.
Boost for Chancellor as housing market set to drive economy
proclaims the Telegraph.
The EY Item Club has apparently released its quarterly survey. The survey makes grim reading for aspiring homeowners.
ITEM has predicted a 3.5% rise in house prices this year, 6.6% in 2014 and 6.7% in 2015.
That compares with economic growth predicted at 1.4%, 2.4% and 2.6%.
Even bigger mortgage burdens for young families then.
And what about the effect on the rest of the economy? Sure enough, the report says:
Hopes that the UK would rebalance its economy towards exports and business investment have been dashed yet again.
The UK’s short-term growth will continue to be fuelled by the consumer. The recovery of the housing market, combined with falling unemployment, rising real incomes and improving confidence levels, will help to keep the tills ringing on the high street.
But the Government’s Help to Buy scheme, which will help fuel the price rises, is not to blame for the economic damage. In fact, it’s NOT A HOUSING BUBBLE, says the Chief Economic Advisor to the ITEM Club.
“Despite the recent criticism of [Help to Buy], the chances of seeing another housing market bubble are extremely slim,” he said. “Household finances are also in much better shape, with debt to income ratios now at sustainable levels.”
And his report says the Goverment’s Help to Buy scheme is “well timed and targetted”.
Lesson 2 next week: how the moon landings proved that it is made of green cheese.