Devlish times in the housing market

Happy Halloween everyone - at a time of the year when things get a little ghoulish and the parents amongst us trudge around our local community watching our children consume vast quantities of sweets, I start to wonder are things getting scary in the property market. Did you see the September house price numbers? Yep they fell, and even worse for us folk in Yorkshire as they fell by 2.2%.

Now you can read into this what you want but to me it’s just a fall. Like a lot of things, for example the stock exchange, the cost bounces around a little. Over the past few months there is growth and this is expected to continue longer term – though there is a realisation that it will taper off eventually, just a case of when.

Housing is spoken a lot at the moment and only recently the Conservatives noted tax exemptions to developers who sell homes at 20% below market value to under 40s who have not yet purchased a property – such a long list of criteria to the point where paying the tax is probably cheaper and easier. Eric Pickles claims 200,000 houses have been delivered by the government which feels a low number to shout about, given the current estimate for new houses per year is higher than this.  It just all feels like it’s spiralling out of control and perspective.

Land is this country is scarce and as certain items needed to build housing. As someone who lives in the countryside, it is troubling to hear that future developments may be constructed in green areas simply because housing needs to be built. Locally 4,500 homes are forecast to be built over the next 10-15 years. I look around and simply thing where! The UK needs to be more creative in how housing is delivered.

The point around scarce assets is simply to say bricks are needed to build most homes and they are scarce. It was interesting to hear Steve Morgan admit that developments are being delayed due to the shortage of not only bricks but labour. It’s like the housing gods are against us – limited land, no labour, no bricks and a planning system that is failing.

Bricks don’t grow on trees but the sudden rush for them is causing problems. Simple answer is we need more but that won’t happen overnight. Labour is our own creation, we simply stopped training people in the downturn and therefore it will take time to train them – it is fixable but needs time. Land will always be limited, use it wisely people. Planning is surely a key battle ground in the election so this should be improved, but not fixed, in the medium future.

Feel free to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to property and construction.

Enjoy the weekend,

Lee

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