Maybe I’m all expensed out. But try as I might, I just can’t get very worked up about recent revelations over how the BBC wastes our money. Yes, sending 407 people to cover the Glastonbury music festival is ridiculous. And spending £100 of licence-payers’ money on a bottle of champagne for Bruce Forsyth’s 80th birthday is a bit cheeky. But compared to the amount of money the government seems to manage to waste on a nigh-on daily basis, the BBC seems a positive model of efficiency.
For example, if you think the £360,000 spent over the past five years on expenses for BBC board members is a waste of money, then how does wasting £280m grab you? That’s the amount the government has put towards its much-hyped Mortgage Rescue Scheme, which launched at the start of this year, according to The Daily Telegraph. The idea behind the scheme is to help families at risk of repossession to stay in their homes. So far, it’s helped just six families. Not great value for money is it?
Vince Cable, the Liberal Democrat Treasury spokesman, argues that government schemes like this are merely deferring the problem of repossession, not solving it. And he’s right – I suspect that a good proportion of the few people who do end up being helped by this, or any other government scheme, will just end up in trouble further down the road, particularly as unemployment continues to rise and more and more firms go bust. But what’s really worrying about the housing market is that the whole thing is currently being artificially propped up by one giant ‘mortgage rescue scheme’ – in the form of near-zero interest rates.
I’ll explain. The latest housing market data may suggest that house prices are starting to bottom out. The Nationwide building society this week reported that prices had risen month-on-month for the third time in the past four months. But if prices are picking up, it’s only because rate cuts have enabled people to hold on to houses they would otherwise have had to sell, thus squeezing the supply of desirable houses on the market.
The growing phenomenon of the so-called ‘reluctant’ landlord – whereby people move house, but hang on to their old property and rent it out – has come about precisely because mortgage payments have fallen so far. It allows vendors to dream of being able to sell their homes for what they believed they were worth back in 2007. The trouble is that this can’t go on forever.
If the economy recovers, rates will rise – as soon as that happens, anyone trying to juggle two mortgages will find they’re in over their head. Or (as I suspect) the economy goes into another slump, and rising job losses eventually lead to more forced sellers and lower prices. Either way, if you’re looking to sell a home, I’d do it now.