New Build Houses At Lowest Ever Level.

Running_Horse

http://www.independent.co.uk/life-style/house-and-home/property/alarm-raised-as-house-building-hits-its-lowest-level-on-record-6256409.html

What is to be done? Tax builders sitting on landbanks? Concrete over the south east? What would you do?

Turnbull2000

Nothing will be done of course. Though we'll probably get some fake concern from the politicians.

nollag2006

Nothing needs to be done. At a time when house prices are more or less flat, there is no need to increase the housing stock. It would just put downward pressure on house prices

Graham_Devon

Theres 2 issues here...

1. Housebuilders simply won't build unless they can sell the homes.
2. Potential buyers cannot afford to pay the price that the housebuyers want.

There are a range of solutions to the above problems:

1. Increase lending and LTV's. However, we will need LTV's of over 100% to allow enough people to match the prices required for builders. We've done this, and regardless of where people wish to suggest the problem started, we suffered the consequences, and it's why we are where we are now.

2. Carry on / invent even more schemes which splits the cost of ownership between friends and families / governments etc. However, this is only a sticking plaster solution, as these people invariably 5-10 years down the line find themselves back at square one again when they want to move. This also increase prices, meaning that saturation point arrives pretty quickly and we have to figure out even more schemes to deal with the same problem.

3. Shared Ownership schemes. This could work. However, again, it just simply increases the prices of the houses as builders realise people can now afford more and they put the prices up to compensate. Shared ownership, on a mass scale, is also a sticking plaster solution, as it delays the problems till later.

4. Mortgage companies stop "rationing" (hate that word, but it's now become a term) mortgages, and offer up to 100% mortgages. Problem here is that's STILL not enough cash for buyers to buy, referring back to point 1.

If anyone wishes to add any further suggestions to the above then I'd welcome them.

That leaves us with 4 suggestions, all of which are being tried, tested and / or are now hitting problems and saturation point.

The ONLY other option is to stop protecting house prices, tax land banks, and get builders building to sell a house at the price supply (where builders can sell what they build) and demand (where people can actually buy) allows.

Housebuilders don't want the above to happen, so instead, they simply aim their products at those who can turn demand into a sale. Larger houses in affluent parts of the country.

Ultimately, we are relying on the government then. The government needs to do something, whethere it's planning related or tax related, to lower the cost of buying a house. I don't particularly mean another scheme which kicks the problem down the road for another 5 years, I mean proper proposals.

Planning relaxations where nimbys are told to damn well shutup. Tesco's don't seem to have problems with NIMBY's. It's all corrupt. Just get on with it and allow these places to be built on the land approved and bought for development.

Tax BTL harder and harsher, in terms of capital gains tax, instead of lowering it to make the prospect of HPI such a juicy factor in buying. I know landlords on here will say HPI isn't the reason, but it damn well is a massive reason. It's like the ice cream seller saying ice cream won't make you fat.

Tax second homes so that they really do end up as a real luxury to the wealthy. You are never going to stop second home ownership. But you can stop HPI rich middle earners buying up properties, just as they stopped people from buyiung gas guzzlers with showroom taxes and large road tax's.

We also desperately need proper rental regulation, regulation which would put many a wanabe and current landlord in it for the quick buck, and those holding on to their houses and renting them out instead of selling, as renting is more profitable, and not that hard.

I'm not going to say lower house prices, as it's not something anyone with any power wants to see. But until that happens, we will continue to have problems, and the problems are getting worse and worse as we continue to desperately try to convince anyone and everyone that the key to a successful housing policy in this country is ever increasing prices.

What do I think will happen? We will meddle and meddle and meddle, until ultimately, a crisis takes over and prices really do crash and cause severe damage. But that could be many years away, and no one cares right now.

Graham_Devon

Oops, apologies for the essay. Be amazed if anyone reads it!!

brit1234

The house builders are a cartel, there is the problem.

Tax land banks to stop the hoarding and bring down land values breaking the stranglehold and giving the chance for small independent builders to build houses cheaper and employing builders off the large builders.

nearlynew

brit1234 wrote: »

The house builders are a cartel, there is the problem.

Tax land banks to stop the hoarding and bring down land values breaking the stranglehold and giving the chance for small independent builders to build houses cheaper and employing builders off the large builders.

Exactly.


If building firms can't afford to build and sell overpriced houses because they have paid too much for the land let them go bust and give someone else a chance.

nollag2006

brit1234 wrote: »

The house builders are a cartel, there is the problem.

Tax land banks to stop the hoarding and bring down land values breaking the stranglehold and giving the chance for small independent builders to build houses cheaper and employing builders off the large builders.

Hi brit - any reason why you've not updated your sig with the October Nationwide figures yet?

:rotfl:

Odds on that you'll change your siggy pretty quickly once the LR figures start to turn positive in a month or two.

Shame you missed the bottom of the market in early 2009

wotsthat

Anyone read the article?

Experts blamed confusion over the Government's new planning laws, the difficult mortgage market and the overall state of the economy for the lack of building.

Would telling nimby's to shut it (they won't), taxing BTL more (adding upward pressure to renters), taxing landbanks (adding upwards pressure to buyers), forcing private companies to sell a product at the price a buyer demands (it's getting silly now) clear up the confusion about planning, sort the mortgage market or improve the economy? Hmm.

Might make a few disgruntled armchair economists feel a bit better though.

wotsthat

brit1234 wrote: »

Tax land banks to stop the hoarding and bring down land values breaking the stranglehold and giving the chance for small independent builders to build houses cheaper and employing builders off the large builders.

Are small independent builders known for building houses cheaper than the large builders?

Are small independent builders going to sell a house for less than it's market value just because it, apparently, costs them less to build.

reweird

If builders don't want to build to make a profit then who the hell are you to complain? People adventure to make money as they and their companies see fit. Not just to please the lowly renter. Maybe just maybe if YOU ventured more and relied less on your supieriours you'd earn enough to make a home for your family.