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City AM: House building is grinding to a halt in central London as house prices drop


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HOLA441
4 hours ago, Patient London FTB said:

Developers can rightly argue that they have to answer to their shareholders and they're within their rights to go slow. And contracts can't be torn up.

Agreed, they have a duty to maximise value for their shareholders, down tools everyone, hoard that land. One more of the squillion reasons for directors' duties to be reformed, never going to happen. Apparently no matter how catastrophically markets fail it's best to leave it up to them and have no truck with commie nonsense like a massive, state-owned and operated national home-building project - loads of homes, loads of proper jobs putting proper wages into people's pockets, easy to fund by borrowing with rates so low. Mad, left-wing, economically illiterate nuttiness.

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HOLA442
6 hours ago, Patient London FTB said:

Developers can rightly argue that they have to answer to their shareholders and they're within their rights to go slow. And contracts can't be torn up. 

If you want to feel more angry, consider that the Help to Buy cash relieves the financial pressure on developers to sell their poorly-performing London units. 

For-profit development is inherently incapable of fixing the housing shortage on its own and it was truly madness to start subsidising it with Help to Buy. The government and electorate are hopefully on a journey to understanding that. 

That's fine, because there isn't a housing shortage. 

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8 hours ago, fru-gal said:

Another negative for London property is that many financiers will be removed from London after Brexit when their companies relocate. Not so many idiots overpaid bankers to buy overpriced London flats in Battersea and elsewhere.

That's surely a positive thing for London property if prices go down? Not a "negative"?

 

12 minutes ago, Patient London FTB said:

Come to London and say that

It's a fact. https://capx.co/there-is-no-uk-housing-crisis-and-there-never-was-one/

 

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HOLA446
38 minutes ago, mrtickle said:

Sorry but the rent inflation figures Lilico quotes are complete ********. If you never had to move and your landlord went easy on rent rises, then the ONS series might be credible. But that simply isn't the average London renter's experience of the market. People have to move for work, landlords sometimes sell, there was the influence of Airbnb, and any churn puts you at risk of having to pay more in a new place. Other figures based on new tenancies show rent inflation closer to 35% between 2009 and 2015. 

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Quote

 

http://www.lse.ac.uk/website-archive/newsAndMedia/news/archives/2016/12/Emergency-housing-package-for-young-Londoners.aspx

“The enormous scale of the capital’s housing problem means it is now not just a local but a national emergency.

 

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http://www.mirror.co.uk/news/uk-news/uk-housing-crisis-now-national-8542855

“The housing crisis is now turning into a national emergency.

 

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http://www.thetimes.co.uk/article/prices-rise-as-lack-of-new-homes-becomes-a-national-emergency-bsclfgg5clc

Prices rise as lack of new homes becomes a ‘national emergency’

 

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http://www.cityam.com/215783/rics-calls-housing-national-emergency-are-uk-politicians-incapable-fixing-crisis

As RICS calls housing a “national emergency”, are UK politicians incapable of fixing the crisis?

 

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http://www.liverpoolecho.co.uk/news/liverpool-news/liverpool-heading-london-style-housing-11695462

The housing crisis has been declared a “national emergency”

 

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http://www.bbc.co.uk/news/uk-england-34209027

21 September 2015

Housing minister Brandon Lewis said the government aimed to see one million new homes over this Parliament, 

 

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http://www.buildingtalk.com/ten-point-plan-to-hit-the-governments-housing-targets/

15 Mar 2017

The Housing Forum has produced a ten-point advisory plan for the Government to ensure its 250,000 homes per annum target is met.

 

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http://www.bbc.co.uk/news/business-37980041

14 November 2016

The housing minister, Gavin Barwell, told me he "didn't agree" the one million new homes target by 2020 would definitely be missed.

 

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Edited by billybong
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HOLA4410
8 hours ago, Patient London FTB said:

Sorry but the rent inflation figures Lilico quotes are complete ********. If you never had to move and your landlord went easy on rent rises, then the ONS series might be credible. But that simply isn't the average London renter's experience of the market. People have to move for work, landlords sometimes sell, there was the influence of Airbnb, and any churn puts you at risk of having to pay more in a new place. Other figures based on new tenancies show rent inflation closer to 35% between 2009 and 2015. 

Absolute rubbish. We moved in in 2008, and our rent has moved with the market up 15% in ten years. Right now we're thinking about moving because renting is so cheap. In my adult life renting has always been cheap in London.

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HOLA4411
On 31/03/2017 at 8:02 AM, Smith said:

Or perhaps we should revisit whether we actually need all these new properties or whether the real issue is price not lack of supply.

This sums up the problem of 'build to solve the housing crisis'. The builders just won't/can't build at affordable prices. This is unpalatable fact is hiding behind the elephant in the room of the house price bubble. The government could be tackling this but by doing so they pop the bubble so won't.

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Another thing - the housing crisis is worse for the poor than the middle class. Look at the number of people going through the homeless system in London. It's possible that while many in London are experiencing modest growth in rents that's because they have more choice of stock in their price range as landlords move on people on lower incomes to take advantage of expanded demand in the middle market. E.g. places like Lewisham and other stops on the London Overground. 

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HOLA4414
On 31 March 2017 at 0:28 PM, billybong said:

Then there's the effect on transport and infrastructure with a sudden increase of thousands of new people suddenly starting to live in the one locality.  That never gets serious mention or debate in the media - all they're interested in is the images/photos of the shiny new high rises.

As long as they don't need kids or GPs or fall sick and walk everywhere it's fine.

Building infrastructure doesn't come cheap - extending the northern line to Battersea power station (a few hundred yards) is costing well over £1bn. Crossrail 2 if it gets built will cost tens of billions - even more when you add in the financing costs of the borrowing needed over time,

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HOLA4417
On 31/03/2017 at 0:45 PM, Patient London FTB said:

Agree. First they have to let developers fail so that cheap land hits the market. Govt buys it and contracts builders to do the construction. 

However, will they let developers fail? Instincts will favour a bailout and developers will play the angle that the construction and funding of affordable homes is dependent on their success. 

Something like the insurance package the govt gave the banks in 2008 might be applicable here - ie. saying to developers "We'll backstop your development at x price, but you have to release the land to someone else or carry on building, and we'll pocket a share of any profits". 

 

Make all land with residential planning permission have a time limit.  The developer must complete so that taxes can be collected on it (council tax and whatever).

Otherwise the developer must sell the site to the government for peanuts (a price agreed at the time of gaining planning permission) to allow the government to complete it possibly by selling it to the original builders competitor to get it done or a direct government department running construction.  Or by compulsory sales at auction or some such.

This will kill land banks with planning permission and thus free up getting approval for any entity wanting such approval.

Need to make it cheaper to complete the construction (than stop further work) if that is possible.

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