Posts Tagged ‘housing market’

New houses never lower prices within their local ‘market’ and the Persimmon CEO’s £110 Million Bonus gives our ‘housing crisis’ the lie

January 9, 2018 Leave a comment

Money HousesHousing has become one of the hot political issues of our time. To read and hear about it in the media, it has become easy to conclude that the Government, our Councils, Housing Associations and Builders alike all share the view that we are in a housing crisis. The picture they paint suggests that they are all doing everything that they possibly can. But should we all really believe?

Laid bare, the lack of housing really does look nothing like the story we are being presented. Immigration inflating real need exponentially has become as much an unspoken truth across the whole country, as it has that 2nd homeowners are leaving seaside and rural property empty for much of the year, whilst they add nothing financially to the communities in which they don’t have time to genuinely reside.

“We need to build more homes” has become the mantra of the many. Yet the real beneficiaries of this process will not be the people who will end up living in many of them. Nor will it be the Government which is operating on the premise that money is the only way to solve any problem, no matter what it might be.

The real beneficiaries of the push to create housing will be the builders and the bankers who finance them, whose real take from all the public money which is being fire-hosed at them is only too well illustrated by the bonus payment being made to the CEO of Persimmon Homes.

Under the auspices of self-serving government at all levels and the ineptitude of policy making and long term strategy which has been rolled out in real time within current planning policy, Builders and Developers of all kinds have found themselves within what can only be described as a smorgasbord of discount and profit and the epitome of the one-sided win-win.

Deals are and have been done, not on the basis of what is best for us all. For if that were the true intention, there would be little need for deals of this kind.

Deals are being done, because the focus of this housing crisis is little more than money and profit itself.

People young and old are being out priced in all parts of the housing market, not because prices reflect the true value of houses and the market, but because the system and government policy is facilitating house builders, mortgage lenders and private landlords to take us all on one massive, great big bubble-building ride.

The evidence is not difficult to find. Wherever we may live, new housing developments are never far away. Yet when homes are released, we never see prices being lowered nearby.

Lower house prices within the communities in which these additional homes are built would be the logical outcome within any localised market which was genuinely left to itself to determine and decide.

Instead this so-called ‘crisis’ continually goes on unsolved, whilst we are being sleepwalked into a national travesty in the shape of an unsustainable housing price bubble which is guaranteed to explode.

When it does, those profiteering and responsible now will be the first to run and hide.


image thanks to unknown

Homes are not commodities and treating them as if they are shows the level of contempt that investors have for the lives of the people who live within them…

November 20, 2014 Leave a comment


The obsession that the Nation has with property may be paying dividends for builders, mortgage companies and investors alike, but the cold hard reality is that we are on the road to making many people homeless.

With whole developments now being snapped up by private companies who are only interested in maximising the level of return, escalating prices will inevitably lead to increasing numbers of applicants for social housing, whilst pushing the next occupants ever closer to the circumstances which would have led to the last tenants having to leave in the first place.

Owners may not have anything to worry about now as they concentrate on the apparently lucrative areas of today such as London. But this problem will almost certainly fan-out across the country, and will become ever bigger for as long as house prices continue to grow and people cannot afford to buy the homes which we are continually told are being built to help them. When have you ever seen newly built houses sold at a lower price than other houses in the area with comparable value?

With local authorities potentially unable to afford to house people in the very near future, the idea that having a home is only a luxury could again soon become a reality for many people. Even the remotest prospect of the return of slums in Great Britain should be sending a shiver down the spines of us all, yet politicians have far from even acknowledged the true depth of the problem.

Like it or not, Government will soon have to accept that there must be controls over the way the property market operates.

This may at the very least require formal regulation to ensure that prices can no longer be inflated by the commission on sales for estate agents; an industry that almost certainly carries a high portion of the responsibility of pushing prices upwards at every opportunity since the time that Right to Buy arrived.

However, steps are also likely to be required to freeze prices and possibly even begin to reduce them so that owning or renting a home is affordable in all areas of the Country for those who are earning a basic wage.

The money men may not like it. But the irresponsible creation of the hollow money which is being used to effectively price people out of their own homes can no longer be countered by the continuing creation of money by Government. The National Debt of over £1 Trillion is accumulating at a rate of over £5000 per second in the interest payments alone – before we even begin to consider the Deficit.

The days when politicians could keep borrowing money today and by doing so defer problems for those who will be in power tomorrow are coming to an end.

The question is, how many more people have to experience their own personal hell before those in power realise that tomorrow was a when, not an if, and that it has already arrived?

image: source unknown 

Giving the responsibility of getting the Housing Market on its feet to Supermarkets will ultimately give money men a level of power which could make future Governments even less relevant to the bankers than they are now…

August 13, 2012 Leave a comment

You quickly learn in management that many of the things you do are down to process – even fire fighting – and this will inevitably take a certain amount of time to do properly unless you are happy to accept little more than a quick fix. So when you see Government Consultations dropping into the mix from nowhere that have all the distinct hallmarks of a ravenous siege engine working at speed, you would probably find yourself asking questions about its drivers, just like I am.

Over recent days, the Estate Agency Industry and The BIS Consultation on Encouraging new business models – the ‘Proposal to amend Estate Agents Act 1979’ has started to come into sharp focus, not least of all within the Industry itself, where the rat knocking at the door appears to be the Supermarkets.

As I recently wrote on this Blog, like many people, I am no great fan of Estate Agents and believe that as an industry, they already carry much of the burden of responsibility for the ridiculously high values which accompany property these days and which in turn has effectively priced many new entrants out of the market.

However, opening the door to the Supermarket Industry is far from the answer to getting the Property Market moving and could itself be one of the most deadly time-bombs that any visionless politician could unleash on an unsuspecting public that just wants money in its pockets once again.

It has been proven time and again that the big Retailers play a very long game as they move further and further towards a level of monopoly in goods retail. And as a monopoly, property sales is one that would have very far reaching consequences indeed, should the day ever come when Supermarkets control the prices we pay for the houses we buy.

Make no mistake, as proven with their dealings over Milk prices only recently in a process which actually took many years, dictating values within such a market would be of untold commercial value to them. So playing the loss-leading game whilst they remove the balance of standing competition from the market – as they have done with many small retailers – would be a process willingly embraced by homeowners, but at what real cost to us all in the long term?

We already have the model in place to show how little more than commission led sales within the Estate Agency Industry has contributed to the very position where a Government Department is attempting to address the effects of the problem rather than the causes. But once again, political idealists may be about to open a whole new can of worms as they blunder into doing so, which could so easily turn what is the disastrous position of the Housing Market today into a full scale catastrophe for us all tomorrow.

Gutsy decision making that will have an impact on the cause of the problem is what is required, rather than assuming that the answer to one problem will be just as suitable for another. After all, you wouldn’t use a sticking plaster to dress a broken leg and send the patient on their way with nothing more than a sweet, unless of course you had no grasp of the impact from doing so.

To get the Housing Market moving, there has to be an appreciation of the gravity of the situation. It is one which will not be solved by inviting in a new set of players onto the board who will play by the very same set of rules, but on scale which means the whole game cannot so easily be controlled.

The Estate Agency Industry needs to change its way of operating and adopt a position of responsibility to both its customers AND to the economy, particularly as the impact of having so far failed to do so has had an arguably unique impact on the economic position that we all experience today.

To play their part, Estate Agents have to move away from commission-based selling and focus upon the process of doing a good job at a fixed price, which relates to house sizes, demographics, location and all the tangible factors which should dictate the price of such a service to domestic and business customers alike. Perhaps they will then sell houses for what they are worth, rather than what they aim to get.

However, today’s Estate Agents are unlikely to make the required difference to the whole Property Market alone and devaluation of the UK’s property portfolio may be a step which no Westminster Politician will ever be prepared to openly consider, even though it may turn out to be the only solution which genuinely works . But giving the responsibility of getting the Housing Market on its feet to Supermarkets will ultimately give money men a level of power which could make future Governments even less relevant to the bankers than they are now.

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