I can tell you the price of a house in 2020. I'll even let you into the secret of how I do it. What I do is lick my finger and stick it into the wind. Works every time, especially on those with no memory and little understanding, and I have the power to send them home comforted or worried, depending on which I choose.
It's a gift I have. And here's a bonus, as a regular reader of this blog you will be given exclusive knowledge of my current predictions for the average house price in England in 2020.
This is partly a marketing ploy, I admit, because I see the National Housing Federation is muscling in on my patch. They have entered the world of house price crystal ball gazing with the engagement of sages from Oxford Economics, who metaphorically are donning the shawl and divining meaning from the cloudy glow.
Scrying, Wikipedia tells me is the technical term for crystal gazing, by the way.
If this were a one off by NHF I wouldn't have minded, but they appear to be doing this regularly. Unluckily for them I do have a memory and I recall the last time they invited the public into the "scryer's booth". And I recall it was a different view of the future we were given then.
But first let me tell you of the NHF prognostication for this year. I admit I have not read the full text of the report, but the press release says the average house price in England will rise 25% by 2013 to £274,700 from £226,000 in 2007.
Taking six years that represents an annual increase of just below 4% per annum. The pattern they suggest is a small further dip in 2009 and then by 2011 a swooshing of prices upward thereafter.
Across the six years, that's an investment lower than you would get in other markets and well under the long term-rate of growth in house prices, if you take the view that house prices grow at about inflation (on the RPI measure) plus about 2.5% or so.
But my interpretation of what is being said in the report, despite the hint of a correction, is that house prices will remain above the long-term average and so this means the view is that there has been a step change in the value of housing as an asset class.
Here I suggest are some brave assumptions on the cost and availability of money over the next few years and the level of affordability, let alone people's expectations of what constitutes a "reasonable" price for a house.
Now against this I look at the futures price which suggests that by 2013, although they will be on the rise, house prices will be about 25% down from the peak they hit in 2008.
My licked finger tells me (and it is seldom wrong if you believe the rumours I spread) that one is too high and one is too low.
Ah, now to the fun part, to the NHF prognostication of a year ago. Here's some embarrassing bits from the press release that was released on August 6th.
It said: "The report, entitled Home Truths, reveals that a housing market crash is 'unlikely' despite the fact that home ownership will move even further out of the reach of many first time buyers".
It said: "The average house price will rise by 40 per cent over the next five years to reach £302,400".
It also forecast house prices this year were to rise by 2.2%.
I have a lot of time for forecasters in the main. It is a worthwhile business, fraught with traps. You need a thick skin to be a forecaster. You will almost always be wrong and if the central prediction is correct it is more likely to be correct for the wrong than the right reasons.
But here is a marketing tip for the NHF: calling your document "Home Truths" presents an obvious hostage to fortune, and I feel sure one that will have had the nice chaps at Oxford twitching.
Further it wouldn't be a bad thing to be a bit clearer about what the interests of your members are:
- Many housing associations are in the mire as a result of heavily buying into the homes to sell business.
- Your members want more help with building social housing.
Is it not the case that where sentiment plays a part, both of these interests are helped if we "play down" house price falls and "play up" house price rises?
Now as promised let me tell you the average price of a house in England in 2020. And I want you to feel comforted by the fact that I am a fully paid up member of the Guild of Snake Oil Salesmen and abide by the code stipulating a money back guarantee if I am proved wrong.
The average house price in 2020 will be £500,000.
So who's scrying now?