Custom Search
|
|
Quantitative Building: Government Says It Will Triple House Building.
quote from Rick Campbell in Inside Housing 15.04.2011 The article on the government's aspiration to create a record number of new houses each year published in last Friday's respected journal "Inside Housing" (Government seeks to triple house building) dragged a whole load of comments out of the housing swamp. I am truly amazed by the stunning insights some of the contributors have made regarding this declaration of policy intention by the government. Mr Campbell, cited above, articulates many of the systemic problems when he highlights the belief that we can only re-create the problems of the past rather than learn from them. His observations, in my opinion, highlight the lack of incisive forward thinking which is such a rare commodity in the housing industry! Obviously we are all worried about the rising costs of red bracers and no-one wants to loose their trousers with dropping house prices, so the only solution is more mortgage lending!!! Brilliant thinking again, let's just inflate another artificial price rise in housing, hey we could call it "Quantitative Building". Private companies build houses in record numbers, Estate Agents, Lawyers and all those whose fees are dependent on house value rather than their own performance (remember sub-prime mortgages?) inflate the prices and in step the banks to "loosen up" lending criteria and provide the unsubstantiated debt required keep the fantasy economy in never never land. I know that we actually need the homes, I know that building them would have an impact on house values and I know that house values are massively over valued at this moment, not exactly rocket economics, but I don't want my house to loose the odd £50K here and there. No, I would rather have a property paper value of millions whilst the economy charges towards stagflation, re-possessions run riot and even the middle class find they haven't enough petrol in the 4x4 to drive little Tarquin to his private school. These are hard times caused by a massive rise in house prices substantiated only by a massive rise in unaffordable debt, FACT. In other words negative equity is just Estate Agent/Financier speak for a market correction due to bad debt. People who go into this spin term negative equity simply borrowed too much, and borrowed way past their ability to safely afford when considering a long term financial contract. But that's ok, there is so much vested interest leached onto the housing market that we should suspend rational free market economics, rig the market, play havoc with the economy, ruin peoples lives but have estate agents running around in nice new BMW's. You see in the world of estate agent blue sky thinking the economy grew by 32% in the last 12 months. I know this for a fact as I have been house hunting in Hertfordhsire recently. I looked at a property that was priced at £315,000 and "substantially reduced" to £309,000 just the other week. Being the sort of person who finds that I suffer from a terrible headache when I hear estate agents drone on in their double speak I decideced to check the prices such properties have sold for over time. The last property in that street, which was identical to the one being "offered", sold in October 2010 for £272.000. and that in my opinion was well over priced. I make that a value increase over six months of 16% and one that assumes a 32% increase in our national wealth per annum. In the face of such a malpractice of economic thinking is it any wonder that when the government announce an intention to build 450,000 new homes each year there is a large outcry from "the market". "Not possible." they shout, "Foolhardy" they scream, "The economics of disaster" they have the bald faced temerity to whinge. They all charged into the comments section of the Inside Housing article and desperately sought to protect their trade. The goverment proposal to build this record number of houses begins to address the problem of our 2 million home shortfall in social housing. To construct such numbers of homes would flood the market with supply and thus impact on house values bringing them, quite rightly, down to something realistic. But the attraction of the policy for a government landed with the task of cutting its own political throat by addressing our national debt burden is more than just about building homes. A stimulus to the economy that such a construction boom would provide has to be better than printing money in the Bank of England. With every run of the press we devalue our economy and gear inflation firmly into the system. If HMG raise taxes they get slaughtered at the polls, if the slash the welfare state they get slaughtered at the polls, if they do nothing they get slaughtered at the polls. Labour built the handcart and the coalition jumped on board to steer it into hell. But a housing construction policy, well might it just divert that handcart's onward rush downhill? From one slippery slope to another, now here's a strange co-incidence! At the same time as a housing boom is being proposed the ability for migrants to come and work in this country is being drastically curtailed. So bye bye all those Polish builders, Pakistani plumbers and Belgian bricklayers, all those traditional jobs immigrants supply labour to; supermarket security guards, cheap exploitable building labour, etc., etc., are now to be taken up by someone else. Who? Well let's get the benefit couch potatoes off the dole and herd them into the building programme. Brilliant, one policy supports another and so we have an element of joined up thinking. But is this going to work? Well, we are either going to allow the market to correct itself or keep covering up the mess with more inflationary mortgage funding or deal with the urgency of the situation. In such a disaster scenario what is needed is a new culture of thinking and on the Inside Housing comments page we have far too many dinosaurs stomping about in the tar pits of their own perception. Home ownership is not the way forward, rental homes continental style is. We have a pensions crises so why can't institutional funds create pension income from private rental values in a substantial chunk of 450,000 homes each year. Hold on, here come the dinosaurs, "You can't build that many homes, you can't make that happen, it is not possible, I can't get my head around this without the walnut popping out of its cup." 1. Change the culture of thinking. 2. Improve the means of production.3. Create an economic stimulus rather than print money. 4. Accept a free market philosophy which prices homes in relation to demand and ability to pay. End the artificial protectionism in this sector. 5. Make housing affordable and re-balance the economy on sound footings. 6. Evolve into birds and fly out of those tar pits. All of these points, except 6 which I have added as a direct challenge to Estate Agent mentality, have been made for the past three years by Professor Peter Ambrose. Adrian Cooper of Team Homes has also been a staunch advocate of a radical overhaul of production methods. Stephen Hill has questioned government thinking and Stephen Battersby has argued that the Housing Minister should be in post for more than the average five months so that policy on this major national balance sheet asset can be cohesive. click on image to play video See more at What Can We Do to produce an Holistic Housing Policy? You can hear their arguments and debates on UK Housing Policy channel on HumanRightsTV. A new culture of thinking, and here I agree with Rick Campbell, rather than repeating the mistakes of the past. Part Four of No Place Like Home by Professor Peter Ambrose UK Housing Policy channel on HumanRightsTV Article Directory: http://www.articledashboard.com evolve.humanrightstv.com/felix-columbidae/2011/quantitative-building-government-says-it-will-triple-house-building www.humanrightstv.com/uk-housing-policy www.humanrightstv.com/uk-housing-policy/z2khr01/homes-as-investment-vehicles |
|