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Monday, 9 May 2016

House Prices, Supply and Turkeys

House builders in action
There seems to be a story being told to us that the best way to reduce house prices is to build more. This all sounds reasonable. Supply and demand and all that. The free market is the answer.

But let's think for a minute. Getting large companies for build more so that they can make less money on each one? That is not attractive to them, surely. House builders are in the business of making money. They only really care about building in order to keep share holders happy, so why would they want to build good houses for people and get less for them. Surely it is in their interest to keep supply short. I would be like turkeys voting for Christmas would it not?

So we must look at this 'crisis' from another angle.

We all know that there are many houses standing empty across the UK, but most are in depressed towns. So do we leave them empty or do we encourage people to live anywhere but London and the SE? After all building loads more houses in the SE will just put ridiculous pressure on water supplies, transport systems and also entail many people spending their waking hours sitting in traffic. So maybe encouraging companies and also Gov to relocate might be an idea.

Maybe we need to make lots of land available for individuals and micro / SME companies so that we develop a smaller scale building industry. So fairdo's to some aspects of Government that is trying to encourage this -, however, it is only really scratching the itch of a much bigger problem. We need to free up land banks that large companies own and also change policy for Government organisations to require them to sell off land for self builds a la social housing system. Section 106 agreements could also be used for such changes.

So if we are serious about our housing crisis we need to radically rethink how we deal with housing and stop the assumption that the house builders are the solution. Effectively, they are the problem and they are also not the type of home builders that we really need for a low carbon future.

1 comment:

  1. A Land Value Tax will help to free up land and make is less profitable to destroy agricultural land, especially when other land and buildings are under utilised.
    The political narrative remains building more homes, despite 27,000 empty dwellings in Wales, and the failure to grasp the idea that private landlords always seek to maximum their rent - and housing associations are no different. This doesn't mean that council housing is the answer, as owning your own home and having the responsibility and opportunity that come with this is very desirable.

    The Dutch municipalities acquire land, build streets, provide the services (infrastructure) and then sell plots to self-builders. If only we had political leaders with the same ambitions for our communities.