Thursday, February 17, 2011

Builders and the BOE are all in it together

UK house-building at lowest level since 1923

The number of new homes completed in England last year fell to its lowest level since 1923, Government figures showed today. Just 102,570 properties were built in 2010, 13% less than in the previous 12 months, and the lowest level during peacetime since 1923, according to Communities and Local Government. Yet the population is growing by roughly 220,000 households per year. No wonder we don't have a crash yet.

Posted by miken @ 06:28 PM (1842 views)
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8 thoughts on “Builders and the BOE are all in it together

  • And just how many of these were flats? I would love to see a breakdown of new housing type over the last 10 years.

    I expect most are crappy flat conversions from auctioned terrace houses.

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  • mark wadsworth says:

    Miken, you say this as if it were A Bad Thing.

    From the point of view of the Home-Owner-ist majority this is An Absolutely Splendid Thing and something to be celebrated.

    ALL HAIL THE HALLOWED GREEN BELT

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  • Seems a bit odd because houses are still ridiculously overpriced so you’d think they would be building as many as possible. I hate to think what will happen when prices go down.

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  • MW, it is a bad thing for non-home owners. The longer this goes on then the more bitter the renters become!

    P.S I am soo glad Alice Cook has returned to blogspotting!

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  • Some time ago, I recall reading an article on the Renegade Economist’s site about the importance of land bank value appreciation to the builders during the boom (sorry, I can’t find it now.) The point was that builders were making more money on land value appreciation than actually building things. After the property market peaked, the easy money from land value appreciation dried up so the incentive for builders to build was reduced and the incentive to sit on land in the hope it will appreciate again increased -> less building.

    Top builder faces huge fall in land bank value
    Way sought out of land bank impasse

    Yet another argument for LVT.

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  • This little snippet just landed via Moneyfacts

    Property tax changes urged

    The Royal Institution of Chartered Surveyors (RICS) wants changes to be made to the tax system to encourage residential property investment. In its pre-Budget submission, RICS urged the coalition to take action to encourage growth in the housing and commercial property sectors. Cutting VAT on the refurbishment of homes and reinstating empty commercial property rate relief are amongst the other proposals put forward by the organisation. “This Budget provides the Government with a chance to encourage growth and innovation in construction and property, providing much needed jobs, tackling the housing shortage and ensuring that businesses have a continuing supply of high quality premises,” said Mark Goodwin, RICS director of external affairs.

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  • There is another option for some – leave the UK for better job prospects and housing costs.

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  • Miken 4, the Home-Owner-Ists don’t care about tenants, who are nasty grubby little people who refuse to “take a stake in society”; conversely, people with BTL “portfolios” are seen as astute businessmen. It strikes me this is like looking down on drug addicts but admiring the business skills of drug dealers. In any event, the angrier renters and priced out people become, the more likely there is to be support for LVT

    QG 5, yup, that’s argument number 4,789 for LVT, stick it on the list.

    Maybe RICS (JC at 6) is right about getting rid of VAT on home improvements (VAT is the worst tax of all) so let’s get rid of it an roll it into higher LVT. How on earth they work out that exempting vacant comercial permises from Business Rates will encourage them to be brought back into use is a mystery to me – if you tax something, you get less of it, and when Labour reduced these exemptions, hey presto, there were fewer empty commercial premises (and that was when the recession was just kicking in).

    Cue somebody who says: “but the landlords will just tear the roof off to avoid Business Rates” which is of course argument number 4,790 for taxing the site value only and not the building on it.

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