Shapps hails collapse in house building

Degenerate

chewmylegoff wrote: »

Presumably housebuilders build as many houses as they think they can sell, so 20,000 houses started last year means house builders do t think they can sell any more than that...or am I missing something?

It can be limited on either the supply or the demand side - it's the lowest of what they are able to build or what they think they would be able to sell for adequate profit. There are many factors on either side that can affect that equation. At the moment finance - both for builders to build and for buyers to buy- is a big one. And then there is always the problems of finding suitable land in suitable locations accounting for planning constraints - which the Tory's localism bill (aka NIMBY's charter) made a lot worse.

Dustykitten

Master of spin is our good old MP Shapps

RUN_RABBIT_RUN

one could call him a modern day squealer with his laughable take on those figures

pqrdef

So there's a housing shortage of crisis proportions? And yet, builders can't build houses because they can't sell them?

Would somebody care to reconcile these statements? Because I can't.

Degenerate

pqrdef wrote: »

So there's a housing shortage of crisis proportions? And yet, builders can't build houses because they can't sell them?

Would somebody care to reconcile these statements? Because I can't.

Builders are building and houses are selling - just not at very high levels. Prices are broadly flat. From a mathmatical point of view we are in a sort of equilibrium. Of course, the mathematics has no care for the increasing number of people in housing need. We could carry on like this for a long time, it will simply create a wider and wider divide between the owner-occupier "haves" and the increasingly overcrowded/under-housed "have nots".

Does that clear it up for you?

pqrdef

Degenerate wrote: »

Does that clear it up for you?

No. It doesn't explain the notion that builders can't sell more houses.

Seems to me that this great pool of people in housing need is full of people who couldn't buy a house if they were surrounded by empty houses, so housing shortage isn't the right diagnosis of the problem.

CKhalvashi

Turnbull2000 wrote: »

The only politically feasible route to lots of housebuilding is a slackening of mortgage restrictions and lots more lending. This may of course result in a rapid rise in prices as loosened lending and a supply shortage that will take at least a decade to recover align, but the alternative is renting forever and investors snapping up the lower end instead.

The Tories are likely well aware that mass housebuilding now combined with restricted mortgage lending would eventually result in a fall in nominal house prices and depreciation of land values. They're clearly determined to avoid this scenario.

However, that's what we need, along with large amounts of homebuilding and job creation in the North, as this will effectively balance out the country, putting most people on an even level.

IMO, if the government could get a national bank to give savers 3.5%, to then give 100% mortgages at 4.5%, we'd be in a position to get the country moving again, especially if this was rolled out at average borrowing of £1tr at a time. £10bn income would surely come in useful with the government as freeholders on leasehold properties?!

Bring in home ownership over housing benifit is my opinion!

Degenerate

pqrdef wrote: »

No. It doesn't explain the notion that builders can't sell more houses.

I don't believe that notion is correct. It's a question of economic viability, both on the building and the buying side, not lack of potential demand.

HAMISH_MCTAVISH

pqrdef wrote: »

So there's a housing shortage of crisis proportions?

Yes.

And yet, builders can't build houses because they can't sell them?

Almost....

Builders can't get the development finance to build houses, because of the dysfunctional credit markets.

Buyers also can't get the mortgage finance to buy houses, because of the dysfunctional mortgage markets.

Would somebody care to reconcile these statements? Because I can't.

Builders can't build, and buyers can't buy.

Both have the same cause.

A dysfunctional and broken lending market.

People that can demonstrably afford to pay a mortgage, and that would have been historically creditworthy, are being refused credit.

As banks must ration supply by tightening lending criteria and raising deposits until the pool of eligible buyers shrinks to match the limited pool of funding.

HAMISH_MCTAVISH

pqrdef wrote: »

Seems to me that this great pool of people in housing need is full of people who couldn't buy a house if they were surrounded by empty houses,

Only because the mortgage market is broken.

They can clearly afford to buy a house when mortgage lending returns to prudent, historically normal, and sensible criteria....

Where a good work history and credit rating means you can get a mortgage with a 5% or 10% deposit, at non-punitive margins above banks funding costs.

We don't have those criteria today though.... So few can buy.

After all, they're already paying more in rent than they would with a mortgage in 90% of the UK. Affordability clearly isn't the problem.

so housing shortage isn't the right diagnosis of the problem.

The mortgage shortage is worsening the problem, and ensuring even fewer houses get built.

But it doesn't change the fact we have a critical housing shortage.