Labour’S Help To Build Scheme

[Venger]

The New Statesman

Labour’s Help to Build scheme will succeed where the coalition has failed

By providing government guarantees to small construction firms we will kickstart housing supply.

by Chris Leslie and Emma Reynolds Published 28 July, 2014 - 18:09

Today on a visit to a small builder in Kent, we outlined Labour’s proposal to boost small house-builders and help the next generation on to the property ladder. Our Help to Build scheme would underwrite bank loans to smaller housebuilders and unlock much-needed finance to get them building.

...http://www.newstatesman.com/politics/2014/07/labour-s-help-build-scheme-will-succeed-where-coalition-has-failed

[Venger]

Scans from

The Times, Monday 28 July 2014.

Hold on for 30% more natural HPI... who will be buying up the newbuilds? Your equity rich master landlords, who can't be victims of hpc, because a few younger people overborrowed, and blameless for their entitlement/didn't know what they were doing/only wanted a home.

Page opposite to the above

[cybernoid]

This just tells me the problem is on the political agenda. Hard to read much more into it than that. More promises of public money going into housing. Trying to stay relevant, electioneering.

We'll see if the problem looks to be resolving itself in a more sustainable way (i.e. lower prices) before the election first of all.

Ten years too late the politicians catch on, same as it ever was.

[Bruce Banner]

Another scheme to prop up the housing market with borrowed money .

[TheCountOfNowhere]

Another scheme to prop up the housing market with borrowed money .

Your very cynical Bruce.

[Bruce Banner]

Your very cynical Bruce.

With LibLabCon you don't even need to read the details to know what it is!

At least we now have an alternative in UKIP.

[Venger]

The biggest builders, including Taylor Wimpey, Barratt Developments and Persimmon, but most of the 112,630 homes completed last year, because banks often will not lend to smaller companies.

His findings show that the number of new homes being registered by smaller companies building fewer than 500 homes has fallen from 66 per cent in 1988 to 27 percent in 2013. Over the same

period, the number of companies registering between one and 100 homes fell from more than 12,000 to 3,000. Many of these smaller companies build only ten homes at a time.

... impossible to borrow.

It would be easier for smaller developers borrow if you don't require to borrow as much, if HTB wasn't supporting land values (imo). And also don't have to try and recoup costs of land to find a price beyond what real market can support via competing with HTB with big favoured developers. Scandal so many smaller developers fallen away - even if some of it is from higher regulation costs, land must play a part, and closed out of borrowing to pay very high prices for land... and a gamble against the HTB developers.

Stimulus and intervention retards the economy in hidden ways. As I understand it, self-build is also falling again from what was already very low levels, and many an owner sat on small plots, not going to sell it for less than it's worth.

Owners of land plots not willing to sell them unless, as in the US, mad offers made. Only big developers get a seat at the table for policy.

Housebuilders Called To Cable-Osborne Talks

Major developers will meet ministers this week to discuss growing concerns about the housing market, Sky News learns.

Monday 02 June 2014

The bosses of Britain's biggest residential developers have been summoned to summits with Vince Cable and George Osborne this week amid growing concerns about the UK housing market. ...Two days later, the Chancellor is understood to be planning to meet executives from several housebuilders to discuss issues including the bottleneck in the supply of new housing stock.

"We're helping young people who can afford a mortgage payment to get a home of their own, even if they don't have a rich mum and dad who can give them the deposit," he said.

"The housing market wasn’t working for them, builders wouldn't build unless buyers could buy."

Ed Balls, the Shadow Chancellor, told Sky's Ian King that rising house prices were fundamentally a supply and demand issue. "If supply is the problem we need more affordable homes, more houses being built - a few thousand houses in Ebbsfleet is not going to do the job."

http://news.sky.com/story/1273982/housebuilders-called-to-cable-osborne-talks

Self build numbers plummetting, from already low levels, because land reflated via schemes. Landowners refusing to sell for what it's worth - and it's always worth more so they hold on. How are new developers supposed to compete against the favoured big developers, who already own vast land banks?

... These figures coincide with a new report from property agents Savills, which has blamed Help to Buy for inflating land values in the North West. In turn, this will make it more expensive for house-builders to acquire sites and deliver homes. The report found that strong developer demand has driven land values up to peak levels. Greenfield land values grew and average of 7.5% across the UK in the year to the end of March, with urban values up 6.4%. In key commuter locations - Crawley, Leamington Spa, Oxford, Sevenoaks and St Albans - greenfield values are now above their former 2007 highs.

Why can't markets on their own pick it up, without the money never runs out solution of the lefties? Stick it on the Gov's tab again.

What's that... £100,000 per crapshack newbuild home and selected developers ensuring their cut?

Because younger buyers can't afford to buy.. only a trickle do via ponzi schemes such as HTB/SO against massively over-valued land values.

Same as in other markets... OBR nonsense.

[Billy soy]

So small builders are being helped because its too expensive to build and prospective homeowners are being helped to buy because its too expensive to buy yet the government and opposition think prices are fine.

[interestrateripoff]

So small builders are being helped because its too expensive to build and prospective homeowners are being helped to buy because its too expensive to buy yet the government and opposition think prices are fine.

Yes but that's all adding to GDP. That's all that counts.

[Bruce Banner]

What is their plan?

The usual.

Another scheme to prop up the housing market with borrowed money .

[onlyme2]

The governement (of all flavours) have nice cosy relationships with the big landbankers - again will not call them builders - they place whatever shit they can on a site to convert their landbank back to cash.

It is a scam and your representatives are in on it, they pander to the corporate lobbyists and directly benefit from this association, property is no different. Truly staggering the collapse - more like controlled demolition of the small building sector.

[NewBrit]

The reasons there are no small builders are:

1. There are almost no plots for sale. This is very evident if you look at other countries where usually one in 4 properties for sale is an empty building plot. For example in Cambridgeshire there are only 2 empty building plots currently for sale, but over a thousand houses. Not good.

2. Insane planning rules that are costly and complex. Only big companies have the money and staff to get planning permission thus squeezing out the small builders.

3. Land with planning permission is 100 times more expensive than land without planning permission. Do I have to say more.

[Venger]

So small builders are being helped because its too expensive to build and prospective homeowners are being helped to buy because its too expensive to buy yet the government and opposition think prices are fine.

And those holding small plot which could be built on, not selling for less than it's worth (crazy high prices). Although that set of 3 garages in London the other day made the council a nice sum... selling for way over guide of £130,000ish at £500,000. At least that council is selling into it.

[byron78]

What is their plan?

In my area?

Oppose all new builds. General NIMBYism.

[EUBanana]

At least we now have an alternative in UKIP.

Shame they are nimbytarian.

If not for their stance on green belts and the like they would be almost the perfect party. But they aren't really different from any of the other political parties when it comes to what is, in essence, land reform.

[EUBanana]

3. Land with planning permission is 100 times more expensive than land without planning permission. Do I have to say more.

This is the absolute bottom line. The reason the housing market in this country is so f00ked is because of planning. The distortions in the market it causes are staggering, to the point that it almost IS the market, the price of land is more about planning than anything else by far.

[Venger]

Well lenders don't seem to happy to lend for land in London at least.

http://www.bloomberg.com/news/2014-07-04/london-lenders-rejecting-homebuilders-as-cost-of-land-skyrockets.html

And Carney and others suggesting main-system financial lenders becoming stronger, with more of the risks being borne by investors.

Would lenders they be lending on projects that don't have PP? I would like to think a lot of the money is coming from speculators, doubling down (forever HPI, "never-enough money to be satisfied... the excuse giver jokers won't allow a crash to hurt me as I didn't know what I was doing, again, this time at 30% higher than 2007 prices" - at risk of a catastrophic reaction to their other interests.