drrayjo Posted August 3, 2007 Share Posted August 3, 2007 (edited) Lack of house building link to price reductions confirmed again Yet another study has confirmed that increasing the supply of land for housing makes little difference to house building rates or house prices. Planning for Housing Affordability, by consultants Green Balance, looked at both broad trends and tracked house prices, completions and land supply over 10 years in a range of localities including growth areas and places with high and low prices. It concludes that house building rates respond only weakly to house prices and that land shortages are not the result of house prices. It is the size, type and quality of homes that has the greatest influence on prices and if local prices decline after extensive building, it is probably because the neighbourhood’s amenity has been damaged rather than the increase in supply. Rather, it says, rising prices reflect an era of rising incomes and availability of finance. While affordability has worsened, this is a problem for those on low incomes and first-time buyers are now devoting smaller proportions of their income to their mortgages than they were in the 1980s. “Simply releasing more land for housing will not solve our housing problems,” said Campaign to Protect Rural England policy director Neil Sinden. “We need the right kind of homes to be built and planned for including to meet the needs of rural communities. This means a significant increase in the provision of subsidised, affordable housing and redoubling our efforts to use the planning system to make better use of existing developed land.” The report concludes that releasing more land to reduce house prices would not work. Allocating more land may increase the flexibility on offer but creates other costs and allows developers to spurn locations where building can do the most good in favour of those with the highest profits. Resolving affordability problems will need more planning, not less. http://www.cpre.org.uk/filegrab/planning-f...ty.pdf?ref=3128 Edited August 3, 2007 by drrayjo Quote Link to comment Share on other sites More sharing options...
Smell the Fear Posted August 3, 2007 Share Posted August 3, 2007 I hate to agree with the CPRE, but there is a lot of truth in that. Look at it this way: people can, by and large, still access appropriate housing in the UK. Most families can stretch themselves to afford a family house. So it seems that the available accomodation is suitable for the needs of the population. Indeed, if there are thousands of empty new builds all over the place we may even have an excess of housing. Now, take this situation and apply a simple credit restriction. The best way to do this is via a mechanism like "the corset" which was used in the 1970s to limit mortgage lending. It acts centrally to depress the creation of debt by banks. Everyone would be in the same position as they are today, able to afford the same house which is suitable for their needs, but they would pay much less for it due to the restriction on how much they could borrow. Quote Link to comment Share on other sites More sharing options...
AteMoose Posted August 3, 2007 Share Posted August 3, 2007 (edited) I hate to agree with the CPRE, but there is a lot of truth in that. Look at it this way: people can, by and large, still access appropriate housing in the UK. Most families can stretch themselves to afford a family house. So it seems that the available accomodation is suitable for the needs of the population. Indeed, if there are thousands of empty new builds all over the place we may even have an excess of housing. Now, take this situation and apply a simple credit restriction. The best way to do this is via a mechanism like "the corset" which was used in the 1970s to limit mortgage lending. It acts centrally to depress the creation of debt by banks. Everyone would be in the same position as they are today, able to afford the same house which is suitable for their needs, but they would pay much less for it due to the restriction on how much they could borrow. governments are powerless to restrict in the global economy, the government wouldn't be able to introduce a corset today as foreign banks and multinational banks lend money. I agree Relaxed Finance has driven the bubble, the UK has a very relaxed policies that have made investment houses flock to London. There is no way the government can tighten through introducing policies, the banks are in control.... I think it can only get worse before it gets better, money supply is running hot... Edited August 3, 2007 by moosetea Quote Link to comment Share on other sites More sharing options...
Smell the Fear Posted August 3, 2007 Share Posted August 3, 2007 governments are powerless to restrict in the global economy, the government wouldn't be able to introduce a corset today as foreign banks and multinational banks lend money. I agree Relaxed Finance has driven the bubble, the UK has a very relaxed policies that have made investment houses flock to London. There is no way the government can tighten through introducing policies, the banks are in control.... I think it can only get worse before it gets better, money supply is running hot... I just don't buy that. Try borrowing 5 times your salary in Germany with little/no deposit, or getting a lie-to-buy mortgage. I suspect it just wouldn't be happening. For what reason are the Germans able to control this beast? Quote Link to comment Share on other sites More sharing options...
Timm Posted August 3, 2007 Share Posted August 3, 2007 For what reason are the Germans able to control this beast? I don't know the answer to this. But I agree that this is the question we should be looking at. Why are higher credit multiples allowed in this country than in other counties? Quote Link to comment Share on other sites More sharing options...
drrayjo Posted August 3, 2007 Author Share Posted August 3, 2007 NuLabour = unelectable if unfriendly to 'business' = elected by friendliness with 'business' X overfriendliness due to naivity = loose regulation, oversight, control + lack of moral centre = UK gangbanged by the worst excesses of the Loose Money Debt-Profit Machine AKA 'credit business' (for now, still the world's favourite but soon, hopefully, to be exposed as the grubby depression producing-ravager that it is) Quote Link to comment Share on other sites More sharing options...
scott666 Posted August 3, 2007 Share Posted August 3, 2007 I don't know the answer to this. But I agree that this is the question we should be looking at. Theodore E Burton wrote (in 1902) 'those countries which seem to suffer the most from these (economic) disturbances (of boom and bust) show from decade to decade the greatest increase in wealth and material prosperity'. That can be applied to the USA and UK. Compare this to Germany where these disturbances tend to manifest themselves in a self-destructive wanderlust and you'll understand why they want to keep things in check. Quote Link to comment Share on other sites More sharing options...
hourkid Posted August 3, 2007 Share Posted August 3, 2007 I hate to agree with the CPRE, but there is a lot of truth in that. Look at it this way: people can, by and large, still access appropriate housing in the UK. Most families can stretch themselves to afford a family house. So it seems that the available accomodation is suitable for the needs of the population. Indeed, if there are thousands of empty new builds all over the place we may even have an excess of housing. Now, take this situation and apply a simple credit restriction. The best way to do this is via a mechanism like "the corset" which was used in the 1970s to limit mortgage lending. It acts centrally to depress the creation of debt by banks. Everyone would be in the same position as they are today, able to afford the same house which is suitable for their needs, but they would pay much less for it due to the restriction on how much they could borrow. A corset would be just another unnecessary and costly (in a forward sense) piece of regulation. Corsets can look awesome. Until they come off that is. That's when all the bits start to hang out and the market goes: look, prices are artificially low, let's buy and push them up. Which is what you're seeing right now. Leave the market alone to find its level. If you wanna play with the big boys and take on 5x your salary or blag it, good luck to you and watch your behind. Quote Link to comment Share on other sites More sharing options...
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