This applies in every walk of life, including journalism. Nowhere is this more evident than in the increasingly panic-stricken discussion about property prices that we have seen in recent months.
Last week was a case in point. Nationwide’s report that prices fell by 2.5 per cent in May was picked up by all media organisations. None saw fit to report that an overview of data from all five main house prices indices provides a different picture – with house prices falling by a much less headline-grabbing rate of 0.6 per cent last month.
Let me first of all declare an interest as my partner and myself are selling not one but two properties in order to buy a joint home elsewhere. That said, we have accepted an offer on one, with a few second and one or two third viewings in the past week on the other. We are prepared to go short of the asking price so I see no reason why there won’t be an offer on the other shortly.
My impression of buyers and sellers in the market, culled from meeting upwards of 30 of them traipsing through both properties in the past four weeks, is that 95 per cent of us are in a similar position and have a similar attitude.
For most of us, talk of Armageddon is both overdone and, in many ways, totally irrelevant. But that is not how media reports are portraying things. Almost every day, yet another survey is published to “prove” the imminence of a housing crash. You might almost assume that some of those writing these stories want them to happen.
That is almost certainly not the case but it is also true that after a few weeks or months writing about the property market at present, a certain mindset begins to creep in.
As a journalist in the 1990s, I spent much of my time writing “house price crash” copy in the first half of the decade and the reverse a few years later. I well remember the doom-laden pieces that we wrote when the RICS/ Nationwide/Halifax price surveys followed each other every month.
We would actively search out any negative fact or gobbet of information in order to “build up” these stories. So, for example, something about the Halifax index at the beginning of a month would always carry a reference to the Nationwide’s own survey, which always comes out two days earlier. The RICS survey then followed. It helped enormously if all three indices pointed to a downward trend.
Meanwhile, our obliging news editors would always find lots of space for our gloom-laden copy at the front of the book. Some of us became accustomed, psychologically conditioned almost, into reflecting a negative view and were loath to stop, even when the market began to tilt back into positive territory.
In fact, as prices began to move back in 1994-95, I remember being asked to file a story for my newspaper that “proved” millions of people were still in negativeequity territory because once you factored legal costs, estate agents’ and removal fees, stamp duty, mortgage application charges and other sundry expenses, their total costs would be greater than the gross sale price of their property.
None of this was untrue as such, but over the next six months or so it became gradually more and more obvious that we were scraping the barrel in terms of negativity.
At which point the pendulum swung the other way and suddenly we began writing breathless pieces on how prices had risen by 1 per cent or more every month, replete with faux-naif “amazement” at how the market was soaring. Nationwide and Halifax experts would be trotted out to tell us that they were predicting 10 per cent increases in the coming 12 months. Buy to let became all the rage.
Today, the pendulum has swung back again. Just as the boring spivs who went on and on about how their “investments” were soaring every week, those who always wanted them to rot in hell are now crawling out of the woodwork to have their gloating moment.
No doubt, a few of my colleagues will conclude that I appear to be accusing them of perverting the facts on property prices in pursuit of a particular agenda. This is definitely not my intention.
What I am suggesting is that some elements in the media – and organisations supplying stories to them – are responsible in part for feeding the sense of crisis, out of which a real crash is increasingly likely to happen.
For those who do not agree, I have one question – would the queues outside Northern Rock last year have been as long as they were if the media had not reported on them the way it did?
Except that this time, we are not just talking about one medium-sized institution’s depositors but an entire market where panic can, and is, becoming self-fulfilling.
Nic Cicutti can be contacted at email@example.com