House Building Boom

 

With the introduction of top slice guarantees for mortgages and interest free schemes for new home buyers, the Chancellor stands accused of fuelling a house price boom rather than a house building boom.

 

Will this not encourage another sub prime disaster where borrowers cannot meet payments when interest rates rise? Would it not have been better to reduce SDLT? Would it not have been better to make more funds availability for affordable housing? Surely intending buyers want to see house prices reduce not rise.

 

It does indeed appear that the Government has taken a gamble with these policies. If house prices fall too much then they will lose, if they rise too much then their critics will be proved right. Yet it is a gamble that is likely to pay off.

 

Mortgage repayment ability and property quality is far superior to that of Sub prime. Interest rates are likely to remain historically low for sometime yet. We have just seen a 30% fall in house prices in real terms. Many would be buyers are paying more each month in rented accommodation. The fear of default is overstated.

 

A reduction of SDLT would loose valuable revenue that is easy and cheap to collect. Large scale additional funding of housing through the public sector is just not available. This is the reality of financial constraints.

 

The Government is therefore gambling on the energy of ownership to provide the confidence to boost activity in the markets. Home buyers do not want to buy in markets that are falling. They wish to see markets rising in order to feel confident to buy. Finance will not become available at higher loan to value ratios until markets start to rise and the good news could be that markets will rise only slowly given low income growth. This is the right background for housing market investment.

 

The success of the Government guarantee plan is likely over in time to bring insurance company’s into the markets offering insurance indemnities that will fulfil the same top slice guarantee allowing many more people to get into the housing markets. Confidence will be restored.

 

However it should not be overlooked that this is only one side of the economic coin. Increased interest in the housing markets needs supply to meet demand. We need to make more land available. Not just swathes of green land outside distant market towns. We have to allow redevelopment at higher densities in towns with existing infrastructure where people want to live. We have to ensure that Local Authorities are signed up to the need to identify opportunities and allow more new homes to be built in towns by a reduction in the red tape and regulation that is strangling progress.

 

If we do not, then the additional demand that might be successfully created will fuel the biggest house price boom we have ever seen.

Latest Blogs

Who may hold the ultimate title? Don't just take our word for it, here is what one of our customers has to say Now it's time to deliver on the promise - More new homes Stamp Duty changes create a boom in self-build in Kent Self Build to Save Tax on Your New Home Denis Minns asks - Will Buy to Let attract another new tax? Urbanisation and globalisation are driving today's labour market Misguided Mansion tax is the Blunt instrument of envy What is the solution to housing affordability? Is shared ownership the answer to housing affordability? Town and Country planning associated publish their analysis of UK 2011 Census Bungalows Is it time to slacken the grey belt? With a chronic housing shortage should we make room for Micro homes? Are private house sale websites now the way to sell your home ? Self Build and save money House Building Boom Housing Markets better facilitate renting rather than ownership. How do we swing the balance back toward ownership? Housing is increasingly being seen as a growth driver for the economy The Government is sure it wishes to see more new houses built but seems far less sure how this is to be done ''They who now will bless the poor, shall yourselves find blessing.'' Carol - Good King Wenceslas Housing markets in United States have turned the corner. Housing starts have increased and there are signs too of rising house prices The Government has implemented a number of measures to increase House Building and getting Housing markets moving. Denis Minns offers House Buyers a Chance to Choose House building has become an expensive game of chance with less players willing to take the risk Am I a man more planned against than planning Denis Minns, Managing Director of DBS Homes wants to give credit where it is due Today, the green vision of Eco towns is stuck in the 'Brown' legacy of environmental red tape and regulation. 'Keen to be green'

Latest News

The ultimate bespoke home for purchaser Offset Stamp Duty to Design & Build your dream home DBS Homes' excellent reputation precedes them Birchwood & Sunningdale, Chelsfield Park - Coming Soon Surrey Collection Coming Soon A modern world in a period shell DBS Homes Housing Association - Shepway Today Wisteria in the Weald Purchasers find that quality shines through DBS Homes - Always thinking about tomorrow Choose an enviously green lifestyle in a DBS home Pinecroft - advertorial Oakwood, Otford - advertorial Stylish design & just 17 minutes from the city

© DBS Sevenaoks Limited 2017    
tel: 01732 240555       email: