Friday, 29 February 2008

Picketing of Foxtons by Class War – house prices

I have seen that Class Wars are going to picket Foxtons in Islington on Monday 3 March (no doubt the incorrect date is to confuse MI5) for what they are calling ‘a demonstration against the greatest con-men of our time’.

I mentioned a while back that have a go at agents season had opened and the hunters were on the scent of estate agents? But, can you blame estate agents (and single out Foxtons) for the rise in house prices?

Surely, it is a little rich to blame any estate agent. Class Wars’ argument (if one can call it that) appears to be that estate agents are solely responsible for the rise in house prices (at least in London). Whilst I am not an economist I do know the principles of supply and demand and market forces.

Foxtons are successful and estate agents alone cannot be held responsible for climbing prices. Yes they are part of the economic mix, but it is ultimately the very people who are protesting that determine the ultimate level of the house price.

Indeed, the interactions between housing and the economy are more pervasive. Housing affects salaries, migration and the overall growth rate of the economy. Indeed, there is argument that property prices should be kept high as when they fall, the economy slumps, and it is normally the poor that suffer more than the rich in a slump. So why doesn't Class War target the agents who are selling the Bishops Row properties for £50million and claim to be busier than ever.

To this end, it could be argued that Class Wars' stance will only accelerate further recession, which at least will drive down property prices ( I am guessing their goal), but no one will be able to afford to buy one as they won’t have jobs and then there is the argument that no one is ever better off in the long term as with falling house prices, there is falling rent so you lose as owners but gain as renters. Too much economics for these pages.

So will Class Wars actions having any impact? Unlikely. If you look at the house price crash predictions for this year’s house prices at you will see predictions from a gain of 5% in property prices to a loss of 35% during 2008. Let’s face it, I could make a prediction.

There are many topics within this post for more detailed and intellectual debate than I can muster, but I would like to defend estate agents as they cannot be held aloft as the sole cause of property price increase.

I have mentioned DEAs becoming realtors and perhaps this is the way the house purchasing process will go as buyers demand a little more personal attention and move away from high street agencies, but will this drive house prices down, I doubt it very much.

Anyway, agent bashing season closes on the first day of Spring, so they are out of time! (I am operating on the disputed first day of spring being 1 March).

See you all on Islington high street on Monday! Tuesday I am picketing the offices of the Met Office for the shameful bringing forward of Spring, bring your daffodils.

1 comment:

Nick Tong said...

That's Tuesday the 4th yeah?