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Dave Beans

Number Of New Homes Built Falls To Record Low

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http://www.independent.co.uk/life-style/house-and-home/property/number-of-new-homes-built-falls-to-record-low-2112727.html

The number of new homes that became available in England dived to a record low during the past year, figures showed today.

The housing supply increased by just 128,680 properties during 2009/10 - the lowest annual level since records began in 2000 and 23% down on the previous year, according to Communities and Local Government.

The fall was largely driven by a drop in new-build properties, which accounted for 97% of the total, with the rest made up of converted buildings and changes of use.

The figures came as other data showed the housing market had failed to pick up during September, with falls in both sales levels and mortgage approvals for people buying a home.

The house building industry has been hit hard by the credit crunch and housing market correction, which caused developers to mothball some sites and put other developments on hold.

The number of new properties coming into circulation during the year was nearly half the level of 207,370 seen during the market's peak in 2007/08.

The industry has warned the Government that measures are needed to halt the decline in house building.

Stewart Baseley, executive chairman of the Home Builders Federation, said: "There is no doubt that the previous planning system was not succeeding in delivering enough homes - but housing delivery, crucial to solving the housing crisis, is not yet increasing and in many areas has actually fallen.

"These figures reveal the extent of the housing supply problem and the need for real action now - cutting red tape and implementing incentives so we can build the homes the country needs."

The number of new homes available fell in all regions of England during 2009/10, with the North West seeing the biggest drop at 38%, followed by the South East at 32%.

Meanwhile, separate figures showed that the number of homes changing hands fell for the second month in a row during September, as potential buyers continued to stay away from the market.

Around 78,000 properties worth more than £40,000 were sold during September, well down on pre-credit crunch levels for the month of more than 120,000, according to HM Revenue & Customs.

Activity in the housing market looks set to remain muted going forward, with lenders reporting a further drop in the number of mortgages that were approved for house purchase during September.

The Bank of England's Trends in Lending report showed that mortgage approvals for house purchases by the major lenders had fallen back to a 17-month low of 44,000 in September, down from 45,000 in August.

Lenders blamed the fall on a "weakening in confidence" among potential buyers, due to expectations that house prices may fall again, as well as uncertainty about the impact of Government spending cuts.

Going forward, most major lenders expect activity in the market to remain subdued, with approvals for house purchase likely to be broadly unchanged, or even fall further.

The housing market has failed to benefit from its traditional summer bounce this year, as potential buyers have adopted a "wait and see" approach.

But sellers have continued to return to the market, creating a mismatch between supply and demand, leading to downward pressure on prices.

Halifax reported that house prices fell by a record 3.6% during September, and some economists have predicted that property will lose 10% of its value between now and the end of 2011.

But most lenders expect house prices to remain broadly unchanged or decline only slightly during the coming year.

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IMO the house building sector could employ many more people if it were aloud to actually build homes on reasonable priced plots.

Each house built represents roughly 3-4 jobs directly and another 3-4 jobs indirectly.

If another 150,000 homes were permitted to be built yearly that would add some 900k to 1.2 million jobs. It would of course also lower rents which would somewhat lower the cost of welfare too.

The government should relax PP greatly to allow people to build and extend and improve.

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In a free market economy our major housebuilders would have failed and their landbanks would have been bought up for viable values and new, lean, companies, and builders who had cash reserves and low debts would emerge.

But alas, the Keynesians know best.

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IMO the house building sector could employ many more people if it were aloud to actually build homes on reasonable priced plots.

Each house built represents roughly 3-4 jobs directly and another 3-4 jobs indirectly.

If another 150,000 homes were permitted to be built yearly that would add some 900k to 1.2 million jobs. It would of course also lower rents which would somewhat lower the cost of welfare too.

The government should relax PP greatly to allow people to build and extend and improve.

Yep imagine the tax take also. It's a win win situation.

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IMO the house building sector could employ many more people if it were aloud to actually build homes on reasonable priced plots.

Each house built represents roughly 3-4 jobs directly and another 3-4 jobs indirectly.

If another 150,000 homes were permitted to be built yearly that would add some 900k to 1.2 million jobs. It would of course also lower rents which would somewhat lower the cost of welfare too.

The government should relax PP greatly to allow people to build and extend and improve.

Well the financial incentives are now there for local councils in that central government will match council tax take for new homes for six years. There is still the possibility that the NIMBY crowd will scupper all the new build though.

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So we are shoehorning in 1.15 people into each new home built in this nadir :o

"Net immigration to the UK (the surplus of people immigrating over people emigrating) in the year to September 2009 was 142,000. This compares with 160,000 in the year to September 2008"

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Well the financial incentives are now there for local councils in that central government will match council tax take for new homes for six years. There is still the possibility that the NIMBY crowd will scupper all the new build though.

We don’t need financial incentives we need the huge financial disincentive of section 106 and hordes of non productive jobs/workers/bribes that turn non PP land into PP land.

A piece of paper from the council decreeing a piece of land worthy of bricks and mortar increases the price of that land from £5k an acre to over £1m an acre!

Without the need for PP or more realistic PP, land would be so much cheaper hence the largest cost in building a house would be removed. That would lead to more being built.

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We don’t need financial incentives we need the huge financial disincentive of section 106 and hordes of non productive jobs/workers/bribes that turn non PP land into PP land.

A piece of paper from the council decreeing a piece of land worthy of bricks and mortar increases the price of that land from £5k an acre to over £1m an acre!

Without the need for PP or more realistic PP, land would be so much cheaper hence the largest cost in building a house would be removed. That would lead to more being built.

Yeah there is a lot of potential for graft in that jump from 5k to over a million. I've often wondered exactly where that money went. Wherever it goes I'm sure there are some firmly entrenched vested interests that will keep your wish from becoming reality.

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So we are shoehorning in 1.15 people into each new home built in this nadir :o

"Net immigration to the UK (the surplus of people immigrating over people emigrating) in the year to September 2009 was 142,000. This compares with 160,000 in the year to September 2008"

UK population has increased from 58.8m in 2001 to 61.8m in 2009

I make that 375k more people per year

From ONS, from 2008

The UK population is projected to increase by 4.3 million by 2018

So they think the next 10 years that’s roughly 430k more people per year.

So you will be shoehorning 3.3 people into each of those homes, bet you most are 2 bed ghetto flats. BTW there is a lot of overcrowding in London and the SE already.

Kidaults (ie those 20-30 and not on state benefits) most of whom still live with mum and dad because supply is so low rents are unaffordably high.

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Yeah there is a lot of potential for graft in that jump from 5k to over a million. I've often wondered exactly where that money went. Wherever it goes I'm sure there are some firmly entrenched vested interests that will keep your wish from becoming reality.

A whole “industry” is built on this task of getting PP from councils.

Some individuals have become very rich off it.

The problem is that they are 100% unproductive and provide absolutely nothing to the country.

I could even accept a compromise for now.

You want to follow a quicker and more reasonable PP system. Pay the government £20k. or perhaps even 15 years council tax as a “building permission permit tax”. There you go Mr smith, as soon as your cheque clears I will rubber stamped your application.

I would wager that would even result in tens of thousands more homes built pa plus obtain hundreds of millions directly in this tax plus low billions indirectly.

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A whole “industry” is built on this task of getting PP from councils . . Pay the government £20k. or perhaps even 15 years council tax as a “building permission permit tax”.

I'm afraid £20K isn't even close: the real figure per house paid by builders is much more. The people who make the real money from housebuilding are the landowners, the consultants (architects, lawyers, planners) and the government (including their agents in local government and housing associations), *not* developers and builders.

In my area (Wokingham), the local council agreed yesterday to give permission to build 10,000 new houses to 2026, with 95% of the houses going to the big housebuilders. Small builders, local housing trusts and self-builders won't get a look-in. in future they will usually be refused planning permission, no matter how well conceived and designed, because their sites will be outside the housing allocation figures decided yesterday and outside the 4 areas approved for building.

In return for the planning permission, the housebuilders will have to pay Section 106 "contributions" to the council averaging £26,800 per house. This money will be used to pay for new infrastructure, supposedly in the areas surrounding the new-build, but in reality frequently siphoned off to support powerful councillors' pet capital projects.

In addition, the housebuilders will have to give away 33-50% of their sites to housing associations as "affordable homes" to rent to people on benefits. The housebuilder is only reimbursed the construction cost of actually building the house. This means all the development costs, the land cost, the S106, the debt interest costs, the corporation tax, and everything else, including the housebuilder's hoped-for profit (otherwise, why bother doing all this work?), have to be borne by the 66-50% of houses that the developer is allowed to try and sell to private buyers.

This helps explain why new houses are so expensive - if you really insist on buying such a house, remember you are also paying for all the local infrastructure and for the highly subsidised rent paid by the people on benefits living in the "affordable" house next door to you.

The high cost of new homes, which is a relatively fixed amount at any one point in time, because most of the costs except the land are relatively predictable, means that if overall house prices fall, or look like they are going to, then new housebuilding will tend to fall as well, because no developer wants to build into a falling market because they will be losing money or might even make a loss, which means they have less money for their next project, and so on.

For all those who long for a house price crash so they can buy a bargain house for themselves, I would say don't forget that this means hundreds of thousands of people out of work in the construction industry (as now), it means less new housebuilding, less infrastructure, and less affordable homes.

Edited by developer

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At least the article used the phrase "housing market correction".

Another poster upthread: "So we are shoehorning in 1.15 people into each new home built in this nadir". And what's so bad about that? If that was all (and other posters' figures suggest otherwise) then we'd still have been over-building. 1 property per person would be a huge oversupply since most people don't live on their own.

Anyway, I'd rather cut down on the number of extra people than build more houses. I've said in other threads how I find the level of development in England depressing, and no-one has ever said anything that has made me change my mind. Quieter, and without there always being someone else nearby no matter where you go, and without being positively crowded in just about anywhere worth going == better quality of life, and better quality of life is what we should all be after. If you want more people in order to justify keeping the building trade going then you're supporting the sort of ultimately unsustainable increases that are landing us in so much mess elsewhere.

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UK population has increased from 58.8m in 2001 to 61.8m in 2009

I make that 375k more people per year

From ONS, from 2008

The UK population is projected to increase by 4.3 million by 2018

So they think the next 10 years that’s roughly 430k more people per year.

So you will be shoehorning 3.3 people into each of those homes, bet you most are 2 bed ghetto flats. BTW there is a lot of overcrowding in London and the SE already.

Kidaults (ie those 20-30 and not on state benefits) most of whom still live with mum and dad because supply is so low rents are unaffordably high.

In the next few years I expect we will see net migration. With an ageing top heavy population I would not put too much hope in these predictions that keep being pumped out to reassure desperate home-owners of the crowded Island theory.

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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