Property pawn

Tonight's "Beat the property slump" on ITV1 (which for the next couple of days can be seen again via ITV Catch Up if you have the Silverlight plugin) contained an interesting media-related accusation:

"One of Britain's foremost media academics, Professor Greg Philo, says that television has played a role in 'quite a scandalous overselling of the property market'.

He believes that whilst cheap credit and high employment started the boom, the spate of TV programmes in its wake created what he calls a "social panic" where people felt they had to buy property whatever their circumstances.

And as so many programmes are repeated, which therefore cite market information which is no longer current, he is especially concerned that television has allowed some programmes to be sponsored by companies which could profit from a false impression."

To their credit, Channel 4 has responded to this problem as well as could be expected: "In later correspondence, Channel 4 said "To clarify, revisits have always had the original record dates astoned on screen. Repeats of older programmes (carried primarily on More 4) now clearly caption the original record date in aston form.""

Also bear in mind that NatWest's 4homes sponsorship deal was presumably put in place during a property boom, meaning that their brand obtains maximum exposure alongside all sorts of Channel 4 property programmes.

And it's up to NatWest as to whether or not someone gets a mortgage approved through them, plus the enthusiasm previously generated by these property shows could have resulted in one of NatWest's competitors (Abbey, Barclays, Halifax, HSBC, etc., etc.) getting a mortgage deal instead if NatWest didn't sponsor them.

So if we assume that NatWest was being just as responsible as all of its competitors in terms of mortgage approvals during and after the property boom, then you can't really blame them for Channel 4's "property porn overdose" together with any effect on the housing market. But what about the association factor working in both directions?

Having a credible name such as NatWest sponsoring property programmes on Channel 4 perhaps gave those same programmes a greater air of credence than they perhaps might have deserved in terms of overencouraging prospective property developers to follow suit, so to speak, since if NatWest thought it was OK then "it must be OK".

All the property porn being shown did make the property development market seem rather glamourous when housing loans were more widely available (and cheaper) at a time when wannabe developers could botch a job and still make a profit because property prices were rising so fast. They could do it, so you could have a go as well.

This was despite the various presenters warning of various pitfalls during the programmes themselves, and if anything illustrates a hidden problem caused by sponsorship and the deregulation of television that has occurred over the last twenty years.

Even if financial products are scrupulously regulated, there are still problems that can be indirectly caused by advertising them in the form of sponsorship, and Channel 4's property porn overdose followed by a credit squeeze has uncovered one of those problems that may not happen until an exact set of circumstances have been reached.

This problem was previously dealt with by severely restricting their promotion, but the relaxation of rules can have unintended side effects as a consequence. Last year's premium phone line scandals caused a hasty revision of regulatory practices, although a new Communications Act may not see the light of day before the next election.

In the meantime it is up to Ofcom to realise what the problems are and to inform politicians of them, but whether any potential financial sponsorship problem is given enough priority when free market practice is still openly encouraged remains to be seen.