In the past couple of weeks much has been said about rising house prices in Scotland showing the 'green shoots' of a recovering economy. The Royal Institution of Chartered Surveyors are one of the organisations which suggest Scotland's housing market has reached a turning point and that prices are on the rise again.
However, experts from Scotland's Citizens Advice, which is celebrating its 70th anniversary this year, are meeting in Edinburgh today to examine how the CAB can help people through the recession. The recession has caused a 10% increase in demand for their services over the past year and they do not expect things to get better anytime soon.
Scotland's CAB chief executive Kaliani Lyle states:
“This recession came about because the economic establishment built a whole economic boom on the flimsy basis of the housing investment market.
“Because house prices were going up and up and up, they believed the economy was strong. And they clung to this belief, regardless of the fact that all the other indicators showed very clearly that it was built on increasing debt.
“Already we are seeing talk about the green shoots of recovery—based on a slight up-turn in the housing market over the last three months.
“Debt, redundancy, housing problems, concerns about benefits, legal issues—all of these are going through the roof because the most vulnerable people in society are seeing their incomes fall, while prices rise and credit sources dry up. And for them, it is about to get worse before it gets better.
“If people in government want to get it right this time, they need to listen to those of us who are actually talking to the most vulnerable people in society, and reflecting what is happening to them.
“This is the reality. And it’s hard to talk the language of recovery when you are dealing face-to-face every day with people who are living with such dreadful circumstances.
Some common sense from the CAB who have to deal with the results of a failed economic policy. House prices are rising because there are fewer houses on the market. Home owners are staying put if possible and this is affecting treasury coffers. Government needs people to move house in order to get their cut in stamp duties. Lawyers need people to move house as, for many, much of their business focuses on the housing market. Is it any wonder the RICS want to talk 'green shoots' ? Of course not, because they also have a self-interest in the housing market.
I prefer the reality spoken by Ms Lyle.
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7 comments:
What is required is a reditribution of wealth - not more credit/debt for the workers. Until that happens this crisis will never be over.
The claim of 'green shoots' is examined in detail over at CynicusEconomicus. Yeah, it's BS.
Agreed, basing an economy on house prices and on people moving around every couple of years or so is "Old Mother Riley" economics, that is trying to live by taking in your own washing. On Monday 25 May I gave a fuller explanation of all this.
The housing market can boom for all i care but under Labour unemployment is rocketing to new levels.
Selling a 2 bed flat in the city for 500k will not feed people who have lost jobs a mile away.
Edinburghs booming housing sector could not save Woolworths, HBOS, RBS and the Dunfermline and infact puts people like the Police, teachers and Healthworkers of moving to the city. I would like to see a crash in the housing market and a more realistic value put on homes so ordinary people can at least get on the property market.
Pain for some but a gain for others and eventualy the many..
Thanks for the link Vronsky, I hadn't read CE today.
I don't think they'll fall Spook, too many people bought in the past few years when prices were high.
Demetrius, thank you for the link. Superb post. I remember seeing them when I was young but can't remember where at all.
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