Indian Bicycle Marketing

From yesterday's Evening Standard:

Shadow housing minister Jack Dromey warned: "Unless the Government invests in building the homes our capital city badly needs,(1) rapidly rising property prices will put the dream of home ownership beyond the grasp of millions of Londoners."(2)

... Housing minister Mark Prisk said:

"Today's figures show our Funding for Lending Scheme, and record low interest rates, have led to the highest level of mortgage lending since 2008.(3) But alongside this, we're also pulling out all the stops to get Britain building,(4) and the increased availability of mortgage finance is boosting confidence in the housing market, and encouraging house builders.(5)

"We've also been working with the Mayor to invest billions of pounds to deliver the fastest rate of affordable housebuilding for two decades."(6)

1) Clearly, when Jack Dromey's party was in government, they did everything they possibly could to drive up house prices and rents - especially in and around London - because that's what gets you re-elected in this country. His government sold off as many council houses as Thatcher did and kept new construction down to under 200,000 a year (very little of which was replacement council houses).

2) What's with the "will"? For the past ten years or so it has been the case there are at least three million people who live and/or work in London who can't afford to buy there any more, that's why a quarter of London's population is now renting privately and there is a large group of London workers who live tens or hundreds of miles away because that is the only place they can afford to rent or buy.

Pots. kettles.

3) That bit's true, actually. What he doesn't mention is that his government is desperately blowing another credit bubble, stoking inflation and robbing savers and taxpayers alike.

4) Nope, The Tories are the true party of the NIMBYs, one of the few election pledges which they have fulfilled is to halve new construction from its old low level to its lowest level in a century, i.e. about 100,000 a year. So he got the word "stop" in the wrong place.

5) Encouraging them to do what? Push up their prices mainly and make handsome margins on the minimum of activity. From the BBC, yesterday:

House-builder Persimmon has announced a big jump in profits, amid "improving customer demand" for its properties. Underlying pre-tax profits were up 40% to £135m in the first six months of 2013, from £97m in same period in 2012.

The company said that it spent £236m acquiring new land, up from £142m in 2012, bringing the total number of plots it owns to 70,716.... It currently has 390 active construction sites across the UK.

6) That's the usual vague promise about what might happen in the future and is not even quantified. Will the money be spent on new construction (good) or wasted on land (bad)? How many homes? Under Labour, virtually no "affordable homes" were built, so improving on that is hardly an achievement.

And IIRC, the Tories were quite happy to sell off thousands of new flats in the Olympic park at a huge loss to some chap who just happened to have donated £50,000 to the party.

All [almost] going swimmingly to plan then, isn't it Mark; well so long as we

don't get mired in endless arguments about what "good-quality" and "affordable" really means ..

On Thursday night the housing minister Mark Prisk said: "We're determined to build a bigger and better private rented sector that gives tenants more choice of good-quality homes. This is part of our wider efforts to get Britain building, which also includes transforming the planning system to support growth and delivering 170,000 new affordable homes by 2015."

Buy-to-let fuels house price boom

Britain's buy-to-let mortgage market has surged to levels not seen since the 2008 financial crash, prompting fears that a prolonged period of cheap money is setting off an unsustainable housing boom.

Lending to landlords topped £5bn in the past three months, a period that preceded the Bank of England's pledge this week to keep interest rates low for the next three years. More than one in 10 mortgages are now being handed to a would-be landlord while first-time buyers are still struggling to get on the housing ladder.

About 40,000 buy-to-let mortgages were advanced in the three months to June, up from 33,000 in the first quarter of the year, as landlords cashed in on cheap mortgage deals and investors sought higher returns than they could get from putting their cash in the bank.

David Whittaker, managing director of Mortgages for Business, said: "Demand for rental property remains red-hot. Landlords are refinancing in their droves to raise enough capital to make further additions to their portfolios."

Housebuilders are also reporting a rush to take advantage of government mortgage subsidies for new homes and a top London estate agent said the value of prestige homes in the capital had risen by 18% – adding £500,000 to the price of a central London home in the past year.

Now is there someone prepared to summarise exactly what is going on in a reasonably short sentence ?

Stephen Lewis, chief economist at Monument Securities, said: "The danger is that, when a flood tide of mortgage finance meets a chronic shortage of housing, the result will be an escalation of house prices."

Thank you Stephen - although, not to be picky you understand, I might have had "cheap, subsidised" in front of "mortgage finance".

"Ignore what your head is telling you and join up now and do your bit to make prices rise even faster"

says Housing Minister Mark

Housing minister Mark Prisk said: "The number of first-time buyers is at its highest level since 2007, but we are always looking for new ways to help hard working people make their dream of homeownership a reality and offer valuable alternatives to the 'bank of mum and dad' to get together that much-needed deposit .

"There have already been over 4,000 reservations since Help to Buy was launched in March, and I would urge anyone looking to buy to contact their local Help to Buy agent and see if they could benefit from this."

Mark was "reaching out in a helpful way" to the "majority of 20 to 45 year-olds [who] are either unsure how government efforts to help first-time buyers can ease the struggle to buy a house, or do not think they will help".

"The Generation Rent report found that 40% of people surveyed did not know whether government initiatives such as NewBuy and Help to Buy will help to ease the struggle to  get on the property ladder, while 30% thought the schemes wouldn't work – but the same proportion believed they would".

They own land! Give them money!

Housing Minister Mark Prisk explains the UK government's Ten Point Plan to subsidise bankers, land bankers and landlords and ensure Unaffordable Housing For Everybody Else.

Spotted by Montesquieu at HPC.

They own land, give them... oh, hang on...

Spotted by Bob E at the BBC:

Housing Minister Mark Prisk said that, "with over three million people relying on the private rented sector for their housing needs, we are determined to attract new players to the market and pull out all the stops to get Britain building".

"That's why we're offering £10bn in loan guarantees to provide up to 15,000 new homes for rent, putting £19.5bn public and private funding into an affordable homes programme..."

Er, we can see a bit of a snag here, sir, you've decided how much taxpayers' money you'd like to throw at them, but they don't actually own any land yet..

"... and why we've identified enough formerly-used surplus public sector land to sell for 100,000 new homes."

Ah, thanks for the clarification, sir. What, with the government having that £29.5 billion to spare and enough land for 100,000 homes, it could of course just build those 100,000 homes itself for under £10 billion, saving the taxpayer about £20 billion, but I'm sure there's a very good reason why giving the private sector three times as much is a better idea. Sir.