It's time to rejoice. The British economy is on the mend and growing again. Retail sales have picked up, output is increasing and house prices are rising.
But the last point indicates the problem. Yet again Britain is building its growth on the housing market, this mythical cure for all our economic problems. While there is talk of rebalancing industrial sectors in favour of manufacturing, the reality is an unsustainable bubble of rising house prices, fed by recent government policies and targeting first time buyers.
People who are struggling to buy their first house will be assisted by loans supported by the state. This will allow sellers to move on and stimulate the housing market, thereby encouraging new building projects and creating jobs in the construction industry. Rather like the building programmes of the 1930, which led to all those estates of semi-detached houses springing up, this will kick start growth in other sectors from suppliers to DIY stores, it is said.
Although there is some merit in such projects, it is in the context of an economy already burdened by excessive debt from the financial crisis, itself a realignment after years of debt-fuelled expansion. Despite going through a banking bailout, the UK still has an overblown financial sector and too little emphasis on manufacturing. House prices are far higher than they should be and this bubble will worsen the situation. Expecting first-time buyer debt to draw us out of recession is the kind of thinking that got us into problems in the first place.
The result of this approach is that we will see short term growth, accompanied by rising house prices, eventually followed by a housing crash. And who will pay the price?
Not the banks, that's for sure.