KBzine: the original kitchen and bathroom industry e-news - since 2002
17th March 2017
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Welcome to the
Yesterday's announcement on the Government's plans to boost British housebuilding, jobs and the economy, (read the report in detail, below) has prompted much discussion from various quarters. Apart from the obvious nit-picking by the Opposition, real fears of householders about over-development by their neighbours and concerns about Green Belt land being destroyed, most seem to be encouraged by the move.
I can see some potential problems though.
Working as an estate agent at weekends (now something of a hobby for me) I am well aware of the damage our ridiculous stamp duty system causes to the housing market. Properties sitting even a fair way above one of the thresholds languish on the books because buyers are reluctant to accept the huge jump in duty they'll pay as a result of moving up into the next tax bracket by even one penny. Vendors of these properties often end up withdrawing from market, creating a barrier to the completion of chains of buyers and sellers because of the resultant shortage of properties in those price brackets. This needed addressing years ago with stamp duty being levied on a sliding scale. Now, with the relaxation in planning laws allowing householders to build that extra bedroom rather than move home, the problem is going to become worse.
Another problem is the lack of confidence in the economy, with those worried about their jobs reluctant to spend - either on new homes or new kitchens and bathrooms. There is also an issue regarding the supply of mortgage finance and I am seeing more and more often, buyers with mortgages in principle having them withdrawn when they decide to offer on a property. This needs to be addressed and I don't think the new proposals go far enough as the money being allocated is negligible compared to what is actually needed to create a market for all the properties that will supposedly be built.
Another 'fly in the ointment' is seen by the Local Government Association, which doesn't believe that the planning system has been responsible for the lack of house building. It has released figures which show a backlog of 400,000 prospective homes which have planning permission but have not been built because of a lack of demand. Jon Neale, director of residential research at global real estate consultancy, Jones Lang LaSalle, backs up this view, saying that most builders are concentrating on margin rather than volume and have no intention of starting a building boom.
It will be interesting to see how things pan out.
7th September 2012