Kirsty Allsop, the Channel Four property cheerleader was appointed Tory Housing Tsar in October 2007. As I wrote at the time, not only was she relentlessly pushing houses on national TV and telling everyone that "rent is dead money", but she had developed a feud in 2004 with Housepricecrash.co.uk, whom she accused of "talking down the market".
In fact even as recently as April 2008 she tells the Telegraph that
The people she finds most irresponsible are those who are trying to whip up fear. "There is a website called Housepricecrash.com and I am their deadliest enemy. They all rent and have a vested interest and enjoyment in watching others suffer. That's sick. Schadenfreude is absolutely disgusting and a terrible trait. There has been overpricing in some areas but this is not America. We are not going into freefall unless we panic ourselves into it."
It turns out that the denizens of Housepricecrach.co.uk are worried about her connections to the Conservatives. One of them wrote to Cameron and posted the following reply he received onto the board on August 8th 2008:
"I am replying on behalf of David Cameron to thank you for taking the time to write to us with your concerns about Kirstie Allsopp's involvement with the Conservative Party.
Kirstie Allsopp has, and continues to be, a valued contributor to the home buying review which the Conservative Party is currently undertaking. She has been extremely helpful in adding a public face to what has been, in the past, a largely closed process.
Kirstie is very experienced in the home-buying and selling process, having been a property search agent for over 10 years. Every week she travels over the UK dealing with the fears, worries and frustrations of buyers and sellers and she sees the full extent of the resulting stress that they all too often suffer in the process. Reducing this stress through increased certainty and speeding up the process is a key objective of the Conservative Home-Buying Review and as such, Kirstie’s involvement in the review has been useful and worthwhile.
You should not feel that because Kirstie is the most visible face of the home buying review that she is by any means the only contributor. We are endeavouring to ensure that all relevant parties are involved to the greatest level possible with the process.
If you are interested please take the time to look at our website: www.homebuyingreview.com which also gives you the opportunity to contribute to the review and put forward any concerns you have.
Thank you, once again, for writing.
Lara Moreno Perez
Office of the Leader of the Opposition
House of Commons
SW1A 0AA "
So it looks like the Conservatives are keeping her on, which is interesting. Kirsty Allsop has cheerled for the housing bubble in a way that no-one in the Labour party ever did.
Indeed she opposed every attempt by the Labour government to slow down the market. And Labour has been trying to slow the property market. Brown abolished MIRAS in April 2000, when it became clear that some people thought that the tax relief was incentive to load up on mortgage debt and never repay/overpay it.
He then introduced stamp duty of 3% on homes over 250k and 5% on homes over 500k in 2003, when it became clear that big bonuses in London were creating a top-down bubble in housing - the classic theory is that if you increase transaction costs, people stop trading houses constantly as though they were shares and instead increase the length of time they stay put (and pay down the mortgage debt during the period they stay put). In particular people with existing houses just below £250k were incentivised not to move - people think twice before moving if they are presented with a stamp duty bill they must pay in cash (whereas the mortgage is borrowed money and doesn't seem quite as "real", even if it is a way bigger amount). That slowed the market for a good six months.
When the market resumed it's upwards trend Mervyn King made a famous statement in June 2004 where he stated that house prices would fall. His words managed to slow the market for all of six months.
The govt then introduced HIPs, which also slowed the market down for a few months. Each slowdown paused the market and allowed people's earnings to catch up a bit, and some more debt to be repaid. They added up to several years of pause, which is why the market didn't surge up so sharply in the last three years before the top in the way the American one did.
But Tories opposed all this, and Allsop in particular resented any attempts to slow the market. Presumably David Cameron appointed her, and keeps her on because he approves of the way she pushed and keeps pushing the housing bubble. Indeed Allsop is campaigning for all stamp duty to be removed so that houses can indeed be traded like shares.
When Tories criticise Labour over the housing situation, we need to shout "Kirsty Allsop" back at them - or "Krusty" as Housepricecrash.co.uk like to call her.