I’ve just seen a billboard advertising Lloyd’s Bank, proudly proclaiming that they are “lending millions to first time house buyers every week”. That sounds good, doesn’t it?
Well, let’s unpick that number a bit.
According to the BBC, the current average UK house price is running at about £242,000. First time house buyers wouldn’t necessarily be spending that, so let’s make an assumption that the average price of a first time house purchase is 60% – around £145,000.
Now let’s also assume that the average first time buyer is able to put down a 20% deposit (a big assumption it seems, given recent government initiatives). That gives an average mortgage of £116,000. So how many mortgages would the back need to be lending to make good on the claim?
Well, £2,000,000 is “millions”. So 2,000,000/116,000=17 and a quarter. But of course many first time buyers are joint mortgagees, so let’s say 10 actual mortgages.
“Lending at least 10 first time mortgages a week” doesn’t have quite the same ring to it, does it? Now I’m not saying that’s what they are doing – it’s just that’s probably the baseline for what they could be doing for the claim to be true. And if it were lots more, you’d expect them to be a bit more specific, wouldn’t you?
You’d have thought after Austen Powers, though, that “millions of pounds” would have lost some of its allure to us by now. Just shows how blinded we get by the mention of big numbers…