Housing bulls have it wrong

If house prices are going to hold up, why aren’t the private equity firms tripping over each other to snap up house-building firms?

Two stories stand out this week. The first is the fact that the City is once again completely gripped by bid fever. A few weeks ago in our cover story, we looked at how the low cost of borrowing around the world is driving private equity firms and companies to snap-up anything in the market that looks remotely undervalued, and with bids about for everything from O2 to P&O the trend shows no signs of abating.

The second story of interest is the figures out from Nationwide showing that, by its measures, house prices are on the up again: if you believe the mortgage company's figures, prices jumped 1.3% in October, pushing the annual rate of growth up to 3.3%. The newspapers faithfully reported this news with headlines suggesting that all is now well with the world and the housing bulls jumped on it as clear evidence that the market is back on form.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.