The Government must
be fairly happy with the progress of the economy as the increase
in some planning fees must be seen as a positive indicator. If the economy was faltering then surely this
would not be an option. The grumble I
have is the almost continual press hype regarding the increase in house
prices. There has to be a more
responsible and balanced view taken by all.
The housing market in London is very strong and increasing on a weekly
basis, however, outside the London area it’s a completely different kettle of
fish ! As a company we undertake work
pretty much across the country from London, along the M4 corridor then up to Shropshire
and down to Cornwall and the one thing we have noticed is the disparity
between the markets.
I think the economy
is doing better and is progressing in the correct direction. However, I hope the Bank of England does not
react to the press or political persuasion (as the elections are looming !) and
use an increase in interest rates to ‘slow’ the housing market. The London market has to be treated
separately and interest rates not used to cool this particular segment of the
market. A large proportion of London properties are being purchased by either
cash-rich or overseas investors who are not affected by UK interest rates. It
will be ‘Joe Public’, the poor souls that do have a mortgage, who can’t afford
too much of a hike in rates that will be hit.
What the government
should do is set up an ‘arm’s length company’ to procure and construct housing
which can be rented to workers on an income of less than a certain figure. However, they must create hundreds of
thousands of these units in and around London, not use housing associations
and keep the set-up separate from all/any political persuasion - it must not be
‘tampered with’ by government officials.
The housing should be split into two sectors (70/30 split) with the 30%
for low/no income families and the 70% for families/people who are in
employment and paying tax back into the system.
We have to move
away from what appears to be the blanket approach of giving council housing to
people on benefits. We have to give more support to those
on low wages, by getting wage earners to pay a rent to the government then the
whole system becomes cash positive, whereas currently people are given benefits
by the government to pay the housing associations and private landlords rent thus
creating the government cash drain ! The
government (ultimately the tax payer) cannot afford to keep the current model
in place - it’s broken, as shown by the current London market. This is not a rant against those on benefits
(that’s a case of ‘by the grace of god it’s not me’), it’s about creating a
system that will/should benefit all in society.
If the government
think they can increase the supply of housing to the open market by ‘relaxing
planning’ then they are equally deluded.
Someone in government must recognise that all major house builders are
in business to make as much money as possible for themselves and their
shareholders. They will not increase supply beyond what they consider
acceptable/profitable as this will mean lower prices (I think turkeys voting
for Christmas is comparable). House
builders have a complete conflict of interest with what the government need to
do yet they manage to have senior figures from their companies within the
Government ‘steering groups’ ! Oh well
some things never change and never will!
