Friday, Apr 25, 2008
Housebuilding cartel attempt to restrict supply
times online: Why build houses if the mortgages aren’t available?
Despite the Bank of England’s move to pump liquidity into the system last week, there is no sign of mortgage conditions easing.
Even if things do improve, Mark Hake, at Merrill Lynch, doubts that it will bring much short-term respite.
This is because there is growing evidence that potential buyers are postponing purchases in anticipation of further price falls. Housebuyers are also nervous about the possibility of losing their jobs John White, Persimmon’s chairman, went as far as to say that present conditions were possibly even worse than in the early 1990s.
Posted by sold out @ 08:24 AM (405 views) Add Comment
5 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. tyrellcorporation said...
This 'supply restriction' will take a few years to engineer properly and be thwarted by large overhangs of unsold pre-owned houses - builders will go bust trying. They need to shift houses to make money and a stagnant market will strangle them. They simply have to start dropping prices to stimulate demand - obvious really.
2. greytornado said...
It is apparent that lots of builders will go bust, there are problems trying to sell what they have already built, let alone what was in the pipeline. The positive aspect is that this should scupper Gordons ill conceived plan to concrete over the South of England, a plan which many consider had no foundation based on any sort of meaningful evidence. In my neck of the woods, Ryde on the Isle of Wight, a deeply unpopular plan to build a massive development on the edge of the Town, Pennyfeathers seems to have been quietly dropped. The only beneficiary of this scheme would have been the massive new Tesco, who would have increased their captive audience.
3. paul said...
But, as soon as prices drop even a little bit, first time buyers are meant to jump in and buy aren't they? (according to Krusty & Phil)
"strong fundamentals" keeping housing demand strong too ... mumble mumble.
4. Rental John said...
Shares across the housing sector slumped today after Persimmon revealed that it would stop building homes on new sites until mortgage conditions improved while speculation grew that Barratt may be forced to raise capital through a rights issue.
Persimmon, which is Britain's biggest housebuilder, said today that sales in the first four months of the year had fallen by 24 per cent........OUCH!
Article from 24th April = http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article3805018.ece
5. crash bandicoot said...
These guys not building houses is the equivalent of "buy to leave" investment. Have you heard that one recommended for a while?