In an unusual departure, BBC News’ Evan Davies shows his colours in a deliberately biased piece online. He explains why he wants a fall in house prices. The bias might upset some, but he explains why, as a homeowner of a certain age (like most of us), falling prices are better than rising ones. This is counter-intuitive. But of course, if your intention is to trade up, or buy for the first time, rising prices make it worse. That is not always the way people think. They see their house/flat rise in value (along with the market) and it reassures: they feel richer, indeed cleverer, and often ready to borrow against the increased value. Older people looking to trade down, and people emigrating benefit more from houses rising, as the proportion of their equity has increased. That bigger or more desireable houses are more expensive is academic. Davies, as per my previous post on the volume of house price measures, provides a shorter term reflection on the impact on this proliferation of information. When there were just two measures, it was much harder to determine if the market direction was shifting. Now, he points out, with so many measures indicating the market has cooled and may be falling, the information is a bit more statistically robust. Davies is one of the smartest people the BBC has, and makes business and economics accessible to all with his entertaining style, which never quite patronises. In contrast, I can’t accord the same respect to prize business editor, Jeff Randall, hired by Greg Dyke at great expense and with much pomp. A sensible head of news would make Davies the onscreen head of business and economics, not least because I sense that Davies understands behavioural finance implicitly, if not even explicitly.

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