From an article at the BBC:
The House Builders Federation said the lack of mortgage availability since the 2008 banking crisis had been "the biggest constraint" on new homes and the indemnity scheme would help to address this.
There's a nice chart in that article showing the number of houses built for private purchasers, which shows annual new construction/sales of rather more than 100,000 from the 1950s all the way up to 2009 or thereabouts, since when it has fallen to a much lower figure.
Gross mortgage lending will be a lot lower this year (£130 billion-odd) than it was in the peak year 2007 (£363 billion) but that is still higher than in all the years leading up to 2000. And somehow all the houses built up to the year 2000 were sold, so what's the problem now?
What have we wrought in the UK?
3 hours ago
5 comments:
According to the page you linked to, mortgages are worth a total of £1.2 trillion. So putting say £100 billion of indemnities in should increase that to £1.3 trillion and increase people's mortgage payments correspondingly. I think it's called "wealth cascading down through the generations".
Turning back to the issue of getting houses built, looking at the graph it looks to me like the problem is that Local Authorities haven't built anything since the 1980s.
Or am I missing something?
P.S. Just read the tagline on that Council of Mortgage Lenders website.
"Our purpose is to represent mortgage lenders and promote sustainable housing finance in the U.K."
I shall be laughing about that for weeks!
"Local Authorities haven't built anything since the 1980s."
Might be because the monies raised from the sales was not ring fenced for new housing. I believe it went to central government. Not one of Maggie's better ideas.
AC, higher house prices and mortgage payments means that wealth is cascading up the generations.
It was an entirely political and spiteful decision to stop building council housing, this is not done with any benevolent aim in mind, like improving people's housing standards by allowing more private housing to be built instead.
FC, Thatcher was highly overrated, she did that deliberately because she had an inkling of the votes to be gained by pushing Home-Owner-Ism. Labour took HOism to extremes of course and it's now mainstream.
"Local Authorities haven't built anything since the 1980s."
Well there's not much point in building council housing if you have to sell it at a discount. ISTR that the money from the sales sat around in bank accounts for years, with the LAs forbidden to use it for anything. What finally happened to it I don't recall, but I don't think it went to central government. Obviously is was not going to be used for building new council housing, because the whole point of the exercise was to reduce the number of council houses as the Tories saw them as a Labour fiefdom.
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