Can the Sun on Sunday really keep Rupert happy?

The Murdoch tabloid will have to buck the industry trend.

So, no pressure then. Thirty six hours before the presses were set to roll for the debut edition of the Sun on Sunday -- aka NotW: Resurection -- Rupert Murdoch took to Twitter. He wrote:

The Sun:great speculation, sweeps, etc on Sunday's sale.I will be very happy at anything substantially over two million!— Rupert Murdoch(@rupertmurdoch) February 24, 2012

 

Murdoch, whose every passing tweet reads like an audition for an as yet to be commissioned series of Grumpy Old Men, has promised staff in Wapping to stick by "you all, in London, for the next several weeks". To some that sounds warm and avuncular. To others, like a threat.

And quite what "substantially over two million" means is anyone's guess.

There remains an appetite for Sunday redtops -- both the Sunday Mirror (sales up 65 per cent since the News of the World stopped printing) and the Daily Star Sunday (up 95 per cent from a lower base) greatly benefitted from the absence of a Murdoch tabloid on the Sabbath.

Yet the overall trend for newspaper sales is firmly in the other direction -- and that hasn't changed in the six and a half months since the NotW said "Thank you and Goodbye".

Consider that most nationals are down substantially (that word again) year on year -- sales for the Sun, for example, are 8.35 per cent lower, according to the most recent figures released by the Audit Bureau of Circulation.

Prior to its closure the NotW was already suffering a similar decline. In the six months from January to June 2011 the paper sold an average of 2.68 million copies a week; impressive numbers but 7.75 per cent fewer compared to the same period 12 moths earlier. Go back to 2010 and the decline was 3 per cent. So the loss of sales is not only ongoing, it's accelerating.

Consider too, that in the age of Leveson, a more button-upped Sunday tabloid will have lost the shock appeal on the news-stand it once had.

The buzz around the first issue will help Murdoch towards his personal target but once things settle into the weekly routine, will the Sun on Sunday really be able to hit 2.5 million, or more?

Regardless, our own Peter Wilby believes the shareholders at News Corp are playing a longer game that ends in the sale of Murdoch's UK newspapers. In the current New Statesman, Wilby writes:

A successful launch of the Sun on Sunday ensures a higher sale price.

 

 

Jon Bernstein, former deputy editor of New Statesman, is a digital strategist and editor. He tweets @Jon_Bernstein. 

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I was wrong about Help to Buy - but I'm still glad it's gone

As a mortgage journalist in 2013, I was deeply sceptical of the guarantee scheme. 

If you just read the headlines about Help to Buy, you could be under the impression that Theresa May has just axed an important scheme for first-time buyers. If you're on the left, you might conclude that she is on a mission to make life worse for ordinary working people. If you just enjoy blue-on-blue action, it's a swipe at the Chancellor she sacked, George Osborne.

Except it's none of those things. Help to Buy mortgage guarantee scheme is a policy that actually worked pretty well - despite the concerns of financial journalists including me - and has served its purpose.

When Osborne first announced Help to Buy in 2013, it was controversial. Mortgage journalists, such as I was at the time, were still mopping up news from the financial crisis. We were still writing up reports about the toxic loan books that had brought the banks crashing down. The idea of the Government promising to bail out mortgage borrowers seemed the height of recklessness.

But the Government always intended Help to Buy mortgage guarantee to act as a stimulus, not a long-term solution. From the beginning, it had an end date - 31 December 2016. The idea was to encourage big banks to start lending again.

So far, the record of Help to Buy has been pretty good. A first-time buyer in 2013 with a 5 per cent deposit had 56 mortgage products to choose from - not much when you consider some of those products would have been ridiculously expensive or would come with many strings attached. By 2016, according to Moneyfacts, first-time buyers had 271 products to choose from, nearly a five-fold increase

Over the same period, financial regulators have introduced much tougher mortgage affordability rules. First-time buyers can be expected to be interrogated about their income, their little luxuries and how they would cope if interest rates rose (contrary to our expectations in 2013, the Bank of England base rate has actually fallen). 

A criticism that still rings true, however, is that the mortgage guarantee scheme only helps boost demand for properties, while doing nothing about the lack of housing supply. Unlike its sister scheme, the Help to Buy equity loan scheme, there is no incentive for property companies to build more homes. According to FullFact, there were just 112,000 homes being built in England and Wales in 2010. By 2015, that had increased, but only to a mere 149,000.

This lack of supply helps to prop up house prices - one of the factors making it so difficult to get on the housing ladder in the first place. In July, the average house price in England was £233,000. This means a first-time buyer with a 5 per cent deposit of £11,650 would still need to be earning nearly £50,000 to meet most mortgage affordability criteria. In other words, the Help to Buy mortgage guarantee is targeted squarely at the middle class.

The Government plans to maintain the Help to Buy equity loan scheme, which is restricted to new builds, and the Help to Buy ISA, which rewards savers at a time of low interest rates. As for Help to Buy mortgage guarantee, the scheme may be dead, but so long as high street banks are offering 95 per cent mortgages, its effects are still with us.