Who’s to blame for the housing market slow down?

Anne ashworth, The Times Property Editor reports.

Blame game

But the profits to be made from such escapades can also propel the traders into reckless loss-making decisions. The resulting stress produces cortisol, another hormone, which deters them from even potentially lucrative deals; they subside into "learned helplessness".

It is not known whether, in the cause of gender equality, the academics behind this study are also investigating the role of hormones in the housing market, where women tend to have the upper hand in choosing a house.

However, learned helplessness, paralysis of a sort, sums up the current mood of homebuyers. They are fearful of repeating the mistakes made by purchasers in previous slowdowns. But even in this state of mind homebuyers are still looking for someone to be held accountable for the gloom that has descended.

The Government has tried to pin the blame for lower house prices on the banks. But mortgage lenders evidently care little about the Prime Minister's opinion, or the threat of his big clunking fist. For, within hours of their credit crunch solution "summit" with Gordon Brown at No 10, Abbey, Halifax, HBOS and Woolwich had all raised their rates on various of their loan offers.

This kind of behaviour is, presumably, the reason why most of the estate agent members of the Royal Institution of Chartered Surveyors (RICS) are now more mad at the banks than at the press over the change in market sentiment. In a recent survey RICS states: "Price falls are being driven by the inability of many to secure finance rather than an influx of supply onto the market."

The slump in transactions being produced from the lack of mortgage funds is likely to send some estate agencies to the wall. This is one side effect of the credit crunch. There are some who contend that estate agents' greed caused the market's upward spiral and its subsequent decline.

And so the blame game continues. But it might be more profitable to examine instead the mistakes made in previous downturns. The most obvious mistake is to buy a home that is still overvalued. Fortunately, the huge amount of price information available online today should make this less likely than in the past. Scanning these figures will be those who live by the principle that, in nervous times, you buy "before you see the light at the end of the tunnel", as one of these risk-takers described it to me. The credit crunch may, however, hold even him back from this adrenalin sport.

Gender imbalance

Just in case those responsible for the research linking testosterone levels to the ups and downs of the Footsie 100 do not get around to the connections between female hormones and house prices, we conducted an informal study of our own. There was general agreement that the wife or girlfriend decides which house to buy, with the bloke ceding to her wishes.

The roles are almost invariably reversed, however, in sales of £4 million or more, "because, in such cases, it's the husband who's the investment banker", as one agent put it. But just in case you were thinking that couples revert to fifties stereotypes in property purchases, Liza-Jane Kelly, the sales director of Marsh & Parsons, finds that men are more likely to be impulsive in these situations.