Prices going down is bad for consumers, apparently.

These days we are told falling prices are good for the economy.  Petrol down in price.  Good news.  Price of train fares down.  Good news.  Price of anything down.  Good news.

So it was an odd one from George Osborne when he said prices of one particular thing would go down if we left the EU.  He said it was bad news. He was talking about house prices.

Now I don’t know if you are like me and sometimes wonder exactly who benefits from the rise in house prices.  Well, there is the obvious one set of people, children selling their parents’ house when they pass away.  But beyond that, who benefits?

Well, it’s not you and me, that’s for sure.  If you discover the value of your house has gone up you may be able to sell for a lot more money than you paid.  But unless you want to live in a tent or considerably down size, you won’t be able to buy a house in the same town and have a wee bit left over because the value of all the other properties has also gone up.

So who does benefit?  Well, it is not the people who want to get on the so called property ladder. They can't afford the higher prices.  

Well, who benefits from higher prices?  Let’s start with Lenders.  A higher price generally will mean you will have to borrow more.  That’s good business for banks and building societies. The friends of remaining in the EU.  Surprised?  Me neither.

Then there are the support services.  Estate agents?  If you do a percentage deal, your costs will go up.  Lawyers?  Higher value, your costs will go up.

The government.  Yes, some houses can be out-with the taxation applied to most house purchases. But in general, the higher the price the more tax the government takes out of your pocket.  Oh yes, and more income from taxing the increased profits of these lenders and services.

So next time someone says, "magic, the value of my property has risen”, ask them who exactly will that benefit.  Cos it sure won't be them.

And when you hear the chancellor saying it will be bad news if house prices drop, ask, for whom?  I think we know the answer.  The Lenders, the estate agents, the lawyer.  And of course HM Treasury. 

Dear old George really must think we are mugs.