Saturday, June 23, 2007

Action time! OFT says supply not the problem!

OFT opens inquiry into the state of UK housing industry

The Office of Fair Trading has launched an investigation into the United Kingdom’s £20 billion housebuilding industry amid concerns over both the quality and time taken to build the country’s housing stock. The investigation will examine any evidence of cartel-like behaviour that may restrict the supply of new homes and fuel house-price rises, although OFT inspectors insist that they are approaching the inquiry with “no assumptions”. Research from the Royal Town Planning Institute shows that the nine largest residential developers have enough land with planning permission to build almost 225,000 homes. That is more than double the number of houses they build annually.

Posted by confused76 @ 11:14 PM (1273 views)
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8 thoughts on “Action time! OFT says supply not the problem!

  • This smells of closing the stable door once the horse has bolted, having a nice enquiry to placate the plebs started when the market has already peaked means the politicians can make plenty of noise without having to do anything or blame anyone. The big profits have already been taken already at the expense of the mortgage owning public, the house building conglomerates known this and have enough ‘fat’ in their margins and ‘land banks’ that they don’t even need to worry about the market dropping and can still turn a profit if prices dropped by 30%.

    Never mind the bollocks this is the great bricks ‘n’ mortar swindle and will be the stuff of legends in years to come.

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  • Houseoflords says:

    Where do they say supply isn’t the problem? I must have missed that bit…

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  • Planning4acrash (previously Pr) says:

    “Builders sometimes have to wait up to two years from the submission of an application until permission is granted.” B^$*^£s, planning authorities have to make a decision within 8 weeks on schemes with less than 10 units or 1000 sqm of commercial, 13 weeks if more than that, and 16 weeks if the scheme is large enough to require an environmental impact statement. The real problem is, not that planners have too long to make decisions, but that these targets for determining an application are not flexible enough to let developers amend a scheme without formally withdrawing it.

    A builder will only take 2yrs or more only if they submit a C$£p scheme. If a developer wants to overshadow their neighbours, create a cramped development, come up with an ugly design, knock down listed buildings that are valued by the community, etc. then they will be refused and quite rightly so. One of the biggest problems is hope value, where a developer buys land for too much, in the expectation that they can build something on a site that they will never get permission for. Of course, hope value is also a clever way of getting a wacking great land bank deposit for development elsewhere on a site that the developer doesn’t intend to build upon!

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  • “Research from the Royal Town Planning Institute shows that the nine largest residential developers have enough land with planning permission to build almost 225,000 homes. That is more than double the number of houses they build annually.”

    Then why didn’t they? Have these 9 deliberated colluded to constrict supply in the face of rampant demand fueled by cheap and easy money? If they we find have, I think we might have to bring back hanging!

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  • The British public have no spine and will do nothing. We need action, riots, blood on the streets.

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  • Planning4acrash (previously Pr) says:

    I’m so glad that the debate has widened now from the simplistic, blame the planner argument. Now people should see that there is no reason why there shouldn’t be a planning system to require standards in urban design, historic conservation, social housing provision, etc. given that the planning system gives consent for double of what builders are willing to construct. The neo-liberalist approach touted by people on this site, such as talking rot, where planning is seen as the enemy, calling for a free for all, where faceless developers are free to concrete the countryside does not stand up to scrutiny and should be laid to rest. The only decent depate about planning is how to make it more responsive to the needs of the communities it serves, because the system is clearly working well for developers.

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  • Guys.
    thanks for answering the pointed (but retoric) question by our blog Peer.

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  • Planning4acrash (previously Pr) says:

    Confused76, I’m confused, what did you just say?!

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