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Jim Armitage: Fallout from a bursting of London’s housing bubble would lap up to No 10 Fallout from a bursting of London’s housing bubble would lap up to No 10
(about 14 hours later)
As the Nationwide becomes the latest in a string of vested interests finally to concede we’re in an overheated housing market, and London’s Telford Homes talks of a four-year waiting list for its properties in London, it’s timely to look at the knock-on effects of a sudden end to the property bubble.As the Nationwide becomes the latest in a string of vested interests finally to concede we’re in an overheated housing market, and London’s Telford Homes talks of a four-year waiting list for its properties in London, it’s timely to look at the knock-on effects of a sudden end to the property bubble.
Negative equity, collapsing consumer confidence and a fall in retail sales of furniture, fridges and other expensive house-move items are the obvious hangover symptoms. But equally pernicious – and of wider political importance – is the direct impact on jobs.Negative equity, collapsing consumer confidence and a fall in retail sales of furniture, fridges and other expensive house-move items are the obvious hangover symptoms. But equally pernicious – and of wider political importance – is the direct impact on jobs.
According to the Office for National Statistics, no fewer than 136,000 more people are now employed in the construction sector than a year ago, before the Help to Buy and other bubble-inflating initiatives really started to bite. That makes it by far the biggest creator of jobs in the whole economy, accounting for one in every five posts created over that period.According to the Office for National Statistics, no fewer than 136,000 more people are now employed in the construction sector than a year ago, before the Help to Buy and other bubble-inflating initiatives really started to bite. That makes it by far the biggest creator of jobs in the whole economy, accounting for one in every five posts created over that period.
The figures are even more pronounced if you drill down into the data covering solely our rising army of the self-employed. This shows that, of the 136,000 new construction jobs, 83,000 were working for themselves. Another way of looking at that is that one in four self-employed jobs created since early 2013 were in construction. And these are only the legit building hires that go through the government statisticians.The figures are even more pronounced if you drill down into the data covering solely our rising army of the self-employed. This shows that, of the 136,000 new construction jobs, 83,000 were working for themselves. Another way of looking at that is that one in four self-employed jobs created since early 2013 were in construction. And these are only the legit building hires that go through the government statisticians.
Construction work is predominantly done by men, but the percentage increases in new employment since the property boom are even more pronounced when it comes to women in associated property jobs – estate agents and the like – where 34,000 more women, up 20 per cent, are now employed in the sector than a year ago.Construction work is predominantly done by men, but the percentage increases in new employment since the property boom are even more pronounced when it comes to women in associated property jobs – estate agents and the like – where 34,000 more women, up 20 per cent, are now employed in the sector than a year ago.
What can we conclude from all this? Only one thing – a bursting of the property bubble would be a disaster for employment. And, given the high number of self-employed on building sites who can be sacked at the drop of a hard hat, that jobs crisis could be rapid. Fast enough to cause further dissatisfaction among working-class voters before next May.What can we conclude from all this? Only one thing – a bursting of the property bubble would be a disaster for employment. And, given the high number of self-employed on building sites who can be sacked at the drop of a hard hat, that jobs crisis could be rapid. Fast enough to cause further dissatisfaction among working-class voters before next May.
Something for the Chancellor, and the Bank of England, to chew over before dismantling Help to Buy, pushing up interest rates or clamping down on mortgage lending.Something for the Chancellor, and the Bank of England, to chew over before dismantling Help to Buy, pushing up interest rates or clamping down on mortgage lending.
London, where the bubble is biggest and most fragile, might not be so resilient to Nigel Farage’s charms after all.London, where the bubble is biggest and most fragile, might not be so resilient to Nigel Farage’s charms after all.
Hannam should have swallowed his medicine
 When it comes to Mr Justice Warren’s views on that arch-dealmaker Ian Hannam, withering is hardly strong enough a word. All the way through Mr Hannam’s email-gate affair, he and his PR team have been banging on about how his honesty was never doubted by the regulator – as if a £450,000 fine for stock market abuse should not be seen as questioning of a man’s character.
With a wit drier than the oil-rich Kurdistan deserts at the heart of the case, Mr Justice Warren looks down his half-moon spectacles at this claim, turns it over in his fingers and crumbles it to dust.
“We note that considerable emphasis has been placed by Mr Hannam on the fact that [the regulator] did not challenge his honesty and integrity. As a man of honesty and integrity, it was therefore surprising to hear certain aspects of his evidence…”
For all Mr Hannam’s irrepressible character, honed in the SAS reserves, it will surely take him a while to stop wincing at that one.
I have no idea how much Mr Hannam spent on legal advice for this case, on top of the fine that he was attempting to overturn. But, for a man so well-versed in geo-political and high financial strategising for his clients’ deals, his decision to put himself through a mangle turned by a forensic QC and a panel of judges seems a spectacular error with more than a hint of hubris.
Particularly when you read how woefully unprepared he appears to have been.
The panel variously described him as “muddled”, “unreliable” and “argumentative.” His evidence was “unfocused” and that of a “man much more interested in and comfortable with the large picture than with the detail”. Details which repeatedly undid him when his evidence was properly scrutinised.
Perhaps being cheered on by so many adoring senior friends in the City wafted a cumulonimbus through his powers of judgment. Those allies were sticking by him as usual at that ultimate City muster station, the first evening at the Chelsea Flower Show last week. When he resigned from JPMorgan to clear his name, he received a standing ovation following a thundering farewell speech: “Classic Hannam,” the audience concluded.
For the FSA, or its successor, the Financial Conduct Authority, the decision will be a huge relief.
As it had argued to the tribunal, overturning this finding could have opened the floodgates to appeals against its other judgments. That seemed a  rather desperate defence. But Mr Hannam was arguably its biggest scalp, taken at a time when the authority was at a low ebb.
For all the stress and time that the case has taken him, Mr Hannam has, throughout the process, has been busier than ever, investing and advising on major deals. Which is another reason why the appeal was so wrongheaded. Had he taken his medicine more humbly back in 2012, we would have all forgotten it by now.