June 11, 2008
Economic crisis, what crisis?
Distracted, momentarily, from the 42 day anti-terror debate.
My eye is caught by the collapsing share prices of Britain’s housebuilders.
Questions are being asked about the financial viability of some of the biggest players, with Barratt, for example, down about 95 per cent in recent months.
Housebuilders have called for drastic policies - such as lifting stamp duty for some buyers - to revive their ailing industry. Jobs losses are inevitable, they warn.
We asked the communities department for reaction today: It says: “The conditions remain in place for a healthy house-building industry in the longer term.” *
My view? The government’s housebuilding target of 200,000 homes a year is looking increasingly hallucinogenic.
* “We recognise that market conditions are currently difficult for housebuilders as result of the global credit crunch, which is why we are putting more measures in place to support industry …However, the continuing high demand for homes from young families and first time buyers over the long term, and our fundamentally strong and stable economy, with record numbers of people in work, mean the conditions remain in place for a healthy house-building industry in the longer term.”
The longer term is not the issue - and any demand from young families and first-time buyers is academic if they can’t get a mortgage. The 200,000 target is a neat illustration of the follies of central planing v. the realities of the market.
Are they putting in place ‘more measures’ to support the industry??
Posted by: Peter Dunkley | June 12th, 2008 at 7:42 am | Report this commentThe industry is in a total mess, the knock on effect from the collapse of this industry is potentially catastrophic.
I’d be willing to bet Westminster directs support in the wrong direction and only when it’s too late. Ultimately the problem lies with lenders, which is nothing we don’t already know, short term support is becoming increasingly essential now, otherwise we will start to see some horrific unemployment figures.
Posted by: Mark | June 14th, 2008 at 11:35 am | Report this commentIf the builders want to sell houses bring the prices down at affordable prices.
Posted by: David | June 16th, 2008 at 9:20 am | Report this commentMark - how I agree - they ain’t seen nothing yet! David - government regs have ensured that there is no way you can build a cheap house - wait till the Eco regs really come in to play! You’ll be lucky to find a developer/contractor still viable to build anyway if this goes on.
Posted by: lillibet | June 17th, 2008 at 1:11 pm | Report this comment