Sunday, October 19, 2008

Kirsty Allsop is still the Tory "Housing Tsar"

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.
Yours sincerely,
Lara Moreno Perez
Office of the Leader of the Opposition
House of Commons
London
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.

13 comments:

Anonymous said...

I was saying for ages that her 'location,location,location' stuff was leading to gullible people trading houses like shares.That along with her totally irresponsible 'the worst/best place to live' was ensuring some people thought house value was the ONLY thing that mattered.Naturally it is in her TV career interest to try and hype up the housing market as much as possible.

CROWN said...

I took particular offence to her comments ' they all rent on HPC'

I own my own property, I am an IFA and I have seen so many of my clients priced out of the market by the housing boom, that has continued unchecked by Gordon Brown and his regulator the FSA.

Kirsty ramped up the market and made the young FTB think that they had to get on the housing ladder. They would jump on with a 6 times income mortgage on interest only because they could not afford repayment and now a couple of years later they are in -ve equity and not even repaying their loan.

Any criticism and she takes the extreme - 'oh you are renters' Well I have 'lost' £50,000 in equity since last year and I hope we are only half way through and we can get back to sensible prices and my clients can stop getting ripped off by these celebrity muppets.

Rant over

Andreas Paterson said...

Excellent post Snowflake, it seems that almost everyone now thinks house prices went way too high so it's good to see that the Tories are clearly out of tune with the national mood.

broncodelsey said...

New Labour looking for scapegoats again,what a surprise,somethings never change.
Can you try to explain why,when a New Labour policy is a success they claim credit but when it's a flop it always someone else's fault?

However,as poll after poll shows the electorate aren't fooled.

snowflake5 said...

broncodelsey - you are ducking the main point - which is that if Tories were really serious about the housing bubble they wouldn't have appointed Kirstie Allop as their housing Tsar.

If she gets her hands on power, you'll see a housing bubble with bells on as she will take every attempt to inflate teh market - to estate agents like her, the more churn the more money they make. Her appointment shows Cameron's lack of judgement.

Hughes Views said...

There's much fun to be had out of this crisis (provided you don't lose your job or house of course). Much amusement to be had for example by watching ardent free-marketers blaming the government for not reining in the housing market (and/or the banks).

Housing is one (of many) markets which illustrate the folly of too heavy a reliance on an unregulated economy. Nearly all its incentives are short-term ones that drive those actively involved in it (as distinct from us mere punters who buy and sell perhaps once a decade) to ramp up prices. But housing should be a long-term business about putting roofs over people's heads and providing steady incomes for builders and developers rather than about making quick bucks for speculators, 'improvers', landlords, lawyers or estate agents.

Ms Allsop seems to be a bog standard Tory from a Boris Johnson-like mould - nice but dim (but not really half as nice as their media projection attempts to make them seem)...

broncodelsey said...

Instead of blaming an individual who is not an MP,not part of the government, perhaps the focus should be on those that allowed the housing market to get totally out of control and now we have a massive crash.

Who allowed the artificially low interest rates for the past 11 years,or rigged the inflation rate via the CPI that excludes house price inflation and virtually anything else that goes up in price,or allowed self certification for mortgage applications,or 125% mortgages or indeed for UK consumers to accumulate 60% of the total EU credit card debt?
I'll give you a clue,it wasn't Kirsty Allsop.

No more boom or bust anyone?

snowflake5 said...

broncodelsey - I'm critising an elected politician - David Cameron - for being such a numpty as to appoint Kirstie Allsop as his Housing Tsar.

Using the bully pulpit of Channel 4's property shows, she has been one of the prime movers in inflating the bubble by going on TV for an hour every week telling people "rent is dead money". Politicians don't get that sort of airtime to make the opposite argument. If they are lucky they get a 30 second soundbite on the news.

Andreas Paterson said...

broncodelsey - If you take a look at the original letter on the subject of the change from RPI to CPI you will note the following paragraph.

The exclusion of certain housing cost elements from the CPI does not
mean that housing developments will not be an important factor for monetary
policy purposes or that house prices will be more volatile under a CPI-based
target. Although the MPC will target CPI inflation, house prices are – and will
continue to be – an important indicator in assessing macroeconomic
developments for monetary policy.


So, in fact the adoption of the CPI never actually excluded house prices from consideration.

The first question here is "What would the Tories have done differently?", from the looks of things they'd have simply stoked up the boom even higher and not even introduced the relatively minor measures to slow it down that Labour did.

The next question is "Given the bursting of the housing bubble, how seriously are the Tories taking it?" Given as Snowflake points out they have appointed, as Housing Tsar, someone who quite clearly knew less about the housing boom than the bloke down the pub. I think it's fair to say: Not that seriously at all.

stocklobster said...

snowflake,great post.kirsty allsopp's an unqualified menace.people should be aware of the real figures and risks involved in house ownership and the uk should be aware of the effect uneducated people like k.a. have on the economy and on communities. i've posted my opinions on the channel 4 website.here's a link if anyone fancies including theirs.antony w.
http://www.channel4.com/4homes/on-tv/relocation-relocation/about-kirstie-allsopp/about-kirstie-allsopp-08-06-24_p_1.html

Anonymous said...

snowflake,great post.kirsty allsopp's an unqualified menace.people should be aware of the real figures and risks involved in house ownership and the uk should be aware of the effect uneducated people like k.a. have on the economy and on communities. i've posted my opinions on the channel 4 website.here's a link if anyone fancies including theirs.antony w.
http://www.channel4.com/4homes/on-tv/relocation-relocation/about-kirstie-allsopp/about-kirstie-allsopp-08-06-24_p_1.html

cfc2000 said...

I love the way she has no shame. Having led people to destroy their lives with debt, now she's hosting a programme about how to deal with the property crash. If evil is judged by the effects produced, she is truly evil. She helped the bubble, and now she's capitalising on the burst.She is the most psychonoxious person on British tv.

heatherjeanerskine said...

who cares what that middle class arsehole thinks. This country is in the state it is through people putting all there money into property. I had to laugh the other night when I saw her on her tv show doing up her cottage. She want's to live in the real world.She should take her homemade button cushions and stick em up her arse. Who cares what that fat bastard thinks