How to read the property press

Last updated: 19 July 2018

Read any news story about property and you’ll come away terrified about a looming “crisis” and blinded by astonishing statistics. How do you pick your way through the hyperbole and get to the truth?

I’ve never been shy about voicing my disdain for the way property is covered in the media. You might be surprised, then – or think I’m a massive hypocrite – to hear that I actually skim hundreds of property news stories every week.

Keeping up with what’s going on in property is a critical part of being a successful investor, and the mainstream press should form part of your knowledge – but it’s easy to draw the wrong conclusions by reading stories that are misleading, confusing or just plain untrue.

An inaccurate headline? Surely not…

To take a particularly good (or bad) example, a story was recently run in a national newspaper with the headline “380,000 landlords look to sell up”.

A moment’s thought will tell you that clearly can’t be true: if that many landlords were quitting, everyone you know who owns a buy-to-let would be talking about it and the share price of firms in the estate agent sector would be soaring. None of that is happening.

Dig deeper, and you’ll find that the truth is that 20% of landlords who were asked “plan to reduce the number of properties in their portfolio”. “Planning to” is very different from doing it, and “reducing the number” isn’t the same as “selling up” – which implies getting out completely. And the kicker? This was a survey of just 856 people, with the results multiplied out.

So how can you keep up with what’s happening without being led astray? The key is to read everything critically, while looking out for some of these common journalistic tricks…

Excessive extrapolation

We’ve just seen one example of this, and there are plenty more: lazy PR people take a tiny group and report the pattern of their answers as if they’d asked everyone in the country. And then equally lazy journalists happily print it.

“Two million tenants likely to be clobbered by rent hikes”, screamed a recent headline. How do we know? Because a letting agent asked a grand total of 1,000 landlords whether they were planning to raise rents. Forty percent of those landlords (that’s a whole 400 out of the roughly 1.75 million landlords in the UK!) said they were, so the agency concluded that 40% of all tenants in the UK (two million people) would see their rents go up.

You don’t need a degree in statistics to know that the intentions of 400 people isn’t going to be a reliable indicator of pretty much anything – yet publications will happily use it to paint a terrifying (and therefore newsworthy) picture.

Biased sampling

It gets worse, because the (small) samples are normally drawn from a group that’s unrepresentative to start with. For example, the 856 people whose responses determined that “380,000 landlords look to sell up” were members of a landlord association – who, generally speaking, tend to have larger portfolios (so they’re more likely to be “planning to reduce the size of their portfolio” by selling one or two when things get bad, because they have more exposure than the average landlord) and skew older so they might be looking to cash in some of their historical capital growth.

A survey of Property Hub Magazine readers could have led to an equally ridiculous headline like “80% of landlords plan to double their portfolios next year” – purely because of who was asked.

Overly emotive words

You’ll notice that the tenants we encountered earlier were going to be “clobbered” by their rents going up. Similarly, you’ll usually see prices “slump” or “surge” rather than rise or fall, and supply be a “flood” or a “drought”. Anything  less than ideal about pretty much anything, meanwhile, is a “crisis”.

A useful exercise when reading headlines is to mentally replace every emotionally charged journalistic cliche with a normal word: so “prices plummet as landlords rush for the exits after tax bombshell” becomes “prices go down  as tax changes cause some landlords to sell up”. Which sounds a whole lot less scary.

(Not very) Hidden agendas

The agenda common to the media as a whole is to make everything sound more dramatic than it really is – especially if it’s negative. And who can blame them? I wouldn’t read a story headlined “Prices have gone down a bit since last month but that’s totally normal for this time of year” either.

But specific publications have their own agendas too – like the Guardian having a major downer on landlords, and the Express wanting to make their home-owning audience feel wealthy by finding evidence of price increases. Being aware of these agendas can help you filter what you read and mentally correct for any bias.

It’s also worth looking out for vested interests in whoever compiled the original research. For example, a recent survey found that “over half of investors no longer view property as a good investment”… in a study commissioned by an investment management firm who only get paid when people invest in non-property assets like shares.

Selective statistics

You can use statistics to show pretty much whatever you want them to – and headlines often cherry-pick the number or interpretation that tells the most dramatic-sounding story.

A recent story told of how mortgage lending had “slumped” (there’s that word again) over the last three months… but buried near the bottom of the article was an admission that it was still 3.3% higher than the same period last year.

Using the same data, you can take your pick of time period to conclude that the market is “soaring” or “in freefall”. The only way to get the full story is to look beyond the headline, and read the whole article.

Please read responsibly

When you read as much of the property press as I do, you notice that what’s reported as happening right now is usually based on very shaky data, and claims about what’s going to happen mostly turn out to be wrong.

Does that mean you should ignore it completely? Not at all… if only because most people read the press, and read it uncritically. That means reading it yourself will tell you what the majority of people have been led to believe – and as it’s the behaviour of large numbers of people that drives markets, in turn it will tell you what the market is likely to do.

You can also use the press to educate yourself – not just find out what other people will be thinking – but it’s essential to read the majority of the story (not just the headline) and attempt to mentally correct for some of the biases and tricks I’ve pointed out. And don’t rely on just the press: use it as one input – along with historical evidence, the opinions of informed people and your own experiences – in forming your own opinion.

And remember: the whole job of the media is to make everything seem more important and urgent than it really is. That’s how they capture more of your attention – and controlling your attention is how they make money. You’ll never get the unvarnished truth – and whatever the truth really is, it’s guaranteed to be a lot more boring than the headline makes out.

A version of this article appears in my column in The Property Hub Magazine – which you should definitely subscribe to.