10 September 2015

Why the housing crisis will remain with us ...

... and why Osborne's schemes to stimulate the market are doomed to failure.  The Times explains:
If anyone is going to ease the acute housing shortage in the next few years, it is the biggest half dozen housebuilding companies. They alone realistically have the financial firepower, the appetite and the skills. Councils have no money. Housing associations lack oomph. Smaller local housebuilders, the kind who would knock up two or three homes on a small plot and were a key component of the industry a decade ago, have disappeared in their droves.
That leaves the likes of Barratt Developments, which yesterday reported a thumping 45 per cent leap in profits, while boasting it had completed 16,447 new homes in the year to June. That was an increase of 12 per cent, significantly above the growth rates of 5-10 per cent achieved in the previous few years.
Strong demand, more plentiful mortgage availability and easier planning rules have helped. So have alternative technologies like timber-framing and off-site roofing assembly, which have speeded up building times. But Barratt is still a long way off from returning to the pre-crisis years, when it sold more than 18,000 homes a year, let alone churning out the 25,000 or more required from it if Britain is seriously to achieve the new homes target of 200,000-250,000 a year that most people think are needed.
It expects its completions growth to slow to just 2 per cent in the current year. Skills shortages are a serious constraint. Bricklayers are earning 20 per cent more than two years ago and are still in short supply, as are carpenters and dryliners. An estimated 300,000 people left the building trade in the 2008-2010 downturn. Training and apprenticeships take time.
Not very promising ...


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