Friday, Jan 25, 2008
Another cunning plan on the rocks
IFAonline: Construction downturn scuppers Brown’s housing plans
Gordon Brown’s ambitious house building plans are unlikely to be achieved because of a downturn in the construction industry, according to the Royal Institute of Chartered Surveyors (RICS). Falling demand for housing, coupled with the credit crunch, have caused construction firms to reduce their workloads, meaning supply issues are likely to continue supporting high house prices in the UK.
Posted by jack c @ 09:56 AM (797 views) Add Comment
16 Comments
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1. jack c said...
News to me that falling demand would support high prices (on any product or service)
2. The Slump said...
If housing supply was the main issue then it would still pay the builders to keep building. Money supply is the real issue
3. Endisnigh said...
Falling demand did not support high prices in the last HPC. Lack of new supply will be offset by BTL stock flooding the market, as landlords try to sell.
4. confused76 said...
"A RICS survey shows 16% more chartered surveyors saw a rise in new building than a fall in the final quarter of 2007, down from 17% in the previous quarter."
so building activity is still rising
while 80% more surveyors are seeing demand falling (buyers inquiries) and mortgage approvals is 40% down y0y so tell me is really demand outstripping supply or vice versa?
for your interest, builders cannot just switch building sites off, there is so much under construction that cannot be halted and will hit the market in 2008
MWAUU AHHA HA HAHA HAHAHAHHAH
5. Uncle Fargas said...
"Falling demand for housing... have caused construction firms to reduce their workloads, meaning supply issues are likely to continue supporting high house prices in the UK."
Wait a minute.. You cant have it both ways. There is either falling demand for housing or there are supply issues you cant have both!
6. Cityfool said...
HEH! That article is the funniest bit of spin I have seen for sometime. What it actually says is supply of new housing stays more or less constant in the face of rapidly falling demand. Mortgage approvals down 40% yr on yr is a quite remarkable figure.
7. This comment has been removed as it was found to be in breach of our Blog Policies.
8. jack c said...
It's possible some builders/developers will run out of funds and projects will be abandoned mid-way - from memory Converted Lurker made reference to this happening in Liverpool recently (despite L'pool have Capital of Culture status)
9. planning4acrash said...
Low demand will support high demand? What the F%$K?!
10. drewster said...
This is ridiculous. The country still needs more housing - the population has grown by a couple of million over the last decade but the housing stock hasn't kept pace. Crash Gordon should commandeer the abandoned building sites and the speculative land banks (or impose a land value tax, or just a special tax on speculative land holdings, whatever works). Then the government could start building on them and by the time the crash is over we might actually have some decent houses.
11. Frabcus said...
drewster or anyone - do you know any good books on how housing development works in this country? I'd like to know who has speculative land banks, how they manage them, how they decide when to build and what? Who usually wins from increased land values when planning permission is granted? It's a complex area, and so important, I feel I need some more info. My instinct is that we're all being ripped off by the system, but you can't push for political change in that system until you understand it.
12. crash bandicoot said...
Drewster, that just isn't this government's style. What they would do is impose a windfall tax, confiscate the building sites, then set up a PPI/PFI scheme so that their approved contractors (who may or may not be contributors to the Labour party) can get rich on public money.
13. It_is_going_with_a_bang said...
Well if GB can come up with 30Billion to save face - lets 'face' it thats what it amounts to, then surely he can conjure up 30Billion and build another 200,000 houses now as council houses.
Private developers are hardly going to build at the same rate they have been if they can't sell the properties.
I can see Brownface coming up with an excuse for not meeting his promises by blaming private developers for building them.
Of course it would not be his fault. It never is.
14. it_is_going_with_a_bang said...
"may even continue to power growth as the economy slows down"
Yes thats right, people will have less money and less able to borrow money,therefore pay more for the over flated housing?
Thats one very optimistic view.
Housing is in short supply in Bangledesh - it doesnt mean constantly inflating house prices.
It is a factor - but one which can be pushed aside by other factors - like no confidence in the market, no credit and a ever increasing number of people virtually bankrupt through personal debt.
15. inbreda said...
Publishers: IFAonline
say no more
16. wdbeast said...
It's all about land.
The developers own all the land with planning permision and as prices fall they will reduce the number of houses built, to control the price.
It is the planning laws that need to change, until they do we will continue to be in the hands of the developers.