It’s The Way You Tell ‘Em, Isn’t It?

I PLACED THE REUTERS FEED in this blog’s left-hand column because of that organisation’s envious reputation as the leading independent news agency. However, it appears its placement should have been accompanied by a health warning.

As always, you can only trust articles that have been researched and written by professional journalists; but it appears that the Reuters UK office is experiencing staff shortage problems.

This health warning is made in the wake of its report, today, headlined ‘Mortgage approvals rise 37.8 percent from a year ago,’ which appears to be sourced from one of those Government press releases (which often remind me of Spink’s).

The report says:-

The number of home purchase loans approved by British banks in January were up nearly 40 percent from a year ago, but fell on the month after a tax exemption on properties worth up to 175,000 pounds expired on Dec 31.

Net mortgage lending growth slowed, data showed on Tuesday. The British Bankers’ Association said 35,083 mortgage applications were approved last month. That was down from the 45,650 loans approved in December but up 37.8 percent from a year ago. Still, it was the lowest since May 2009.

Net mortgage lending rose by 2.7 billion pounds in January, compared with 3.5 billion pounds in December, which was the slowest pace of growth since last July. The figures come after a Bank of England survey last week showed mortgage approvals by Britain’s biggest lenders had fallen last month.

The BBA said the monthly decline was partly due to a reversal of a rush of activity at the end of last year as homebuyers sought to benefit from an exemption from tax on properties worth up to 175,000 pounds, which expired on December 31.

“It was no surprise to see the January mortgage figures falling back from December, when transactions were being pushed through to beat the end of stamp duty relief,” said BBA Director of Statistics David Dooks.

“There was a natural reaction in the January figures and the bad weather further suppressed market activity.”

And here is a Daily Mail (un-by-lined) reporter, writing-up a piece after properly verifying the Government’s release.

The staff reporter constructs the headline: ‘End of the stamp duty holiday sees mortgage lending slump to eight-year low’:-

Mortgage lending slumped to an eight-and-a-half-year low during January as the housing market suffered a lull following the end of the Government’s stamp duty holiday.

The major banks advanced just £8.02billion during the month, 26 per cent down on December’s figure and the lowest level since May 2001, according to the British Bankers’ Association.

The group blamed the fall on a combination of people rushing through purchases during December to beat the end of the stamp duty holiday, and the wintry weather during January hitting market activity.

Lending had been unusually strong during December, with advances totalling £10.92 billion, the highest figure for more than a year, during what is traditionally a quiet month for the housing market.

The rise was attributed to people buying lower value homes pushing through purchases before the stamp duty threshold fell from £175,000 back to £125,000 at the beginning of this year.

The figures are in line with data reported by the Council of Mortgage Lenders for January, which showed that total lending had fallen to a 10-year low of £9.1billion.

David Dooks, BBA statistics director, said: ‘It was no surprise to see the January mortgage figures falling back from December, when transactions were being pushed through to beat the end of the stamp duty relief.

‘There was a natural reaction in the January figures and the bad weather further suppressed market activity.’

The BBA figures also suggested that lending is likely to remain subdued during the first quarter of this year, with the number of mortgages approved for house purchase falling to its lowest level for eight months of 35,083.

The figure is 23 per cent down on the level reported for December, which had been the highest for 26 months.

Loans in the pipeline for people remortgaging also dived to a 10-year low of 20,252 during January, while the number of people taking out buy-to-let mortgages or releasing equity from their property fell to its lowest level since records began in September 1997.

Howard Archer, chief UK and European economist at IHS Global Insight, said: ‘January’s marked relapse in mortgage approvals was undoubtedly the consequence of both the very bad weather and some activity having been brought forward to late-2009 to beat the price threshold for stamp duty on house purchases moving back down from £175,000 to £125,000 at the start of January.

‘The marked relapse in mortgage activity in January reinforces our suspicion that house prices are likely to suffer a correction at some point in 2010 and they will be essentially only flat over the year.’

Unsecured lending remained subdued during January as the bad weather put people off shopping, while demand was also lower following Christmas.

People spent £5.6billion on their credit cards during the month but, once repayments of £5.9billion were taken into account, outstanding debt rose by £261million due to interest and charges.

Borrowing through personal loans and overdrafts contracted for the 14th consecutive month with people repaying £334million more than they were lent in January.

Savings levels also held up well, with people increasing their deposits by £2.46billion, down on the previous month’s figure but broadly in line with the recent six-month average.

The last time I was forced to criticise Reuters was last year, when Cynical Observer was telling me how Government spin was being put on a Reuters’ piece – apparently by its editorial department.

As these examples show, you can normally spot a spin-piece by its length; because the author just wants to pick-out the ‘good’ points for public consumption and bury all contrary facts.

And that is the reason why, as I explained to a reader recently, I often ‘repeat’ pieces in this blog’s centre column – despite the fact it was available on the Reuters (or Echo) news feeds.

I have such an aversion to political spin!

… (24/02/2010) – A reader has just sent me this, poking fun at ‘political spin’ whilst driving home a valid point. It is too good to be hidden away in the comments section…

We are in DEEP trouble…

The population of this country is approximately 60 million. 

32 million are retired.

That leaves 28 million to do the work…

There are 17 million in school or at Universities.

Which leaves 11 million to do the work…

Of this there are 8 million employed by the UK government.

Leaving 3 million to do the work…

1.2 million are in the armed forces preoccupied with killing Osama Bin-Laden, and fighting in Afghanistan.

Which leaves 1.8 million to do the work…

Take from that total the 0.8 million people who work for Local County Councils. And that leaves 1 million to do the work…

At any given time there are 488,000 people in hospitals or claiming Invalidity Benefit.

Leaving 512,000 to do the work…

Now, there are 511,998 people in prisons.

That leaves just two people to do the work…

You and me…

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