A bit weird

So house prices are going down, hundreds of thousands sit around unsold.

Moreover, with housing supply a continuing issue, we can scarcely afford to let the house building industry, already severely in debt and landed with thousands of unsold houses for which there are no sign of buyers, sink into bankruptcy. Without a functioning building industry, there is little chance of the three million new homes we so desperately need being delivered. Getting first-time buyers back into the market and making use of the glut of unsold stock are sensible aims.

OK, and the solution is?

But these measures, welcome as they are, will not be enough alone to revive the battered housing market, let alone the faltering UK economy. Brown must also act where he has the most leverage, namely the delivery of new affordable housing. Ministers have already set aside £8bn to be spent over the next three years on building more than 100,000 social homes. This funding must be frontloaded and used in a way that gets the market moving: start building the social homes, and plenty of them, now.

The answer to a glut of supply is to increase supply?

Really?

6 comments on “A bit weird

  1. Well you don’t revive a market by restricting supply and you can have a very healthy market with increased supply and falling prices – think computers.

  2. We either have a shortage of houses or a surplus of people otherwise house prices would have stayed stable, before the availability of finance was (necessarily) reduced, which is what has caused the prices to drop.
    Unless more building land is made available wich entails reducing that set aside for green belt house prices will resume their upward march once the finance problem is got over in a few years as the demand will remain and the supply of land will remain fixed.
    Exisring houseowners will fight any reduction in green belt restrictions because their assets would diminish in value (the value consists too much in owning permission to build).
    Of course were this to happen then those with money to invest might choose a company that makes things, rather than a thing which gets rarer,to invest in so we’d all get better off.

  3. Well you don’t revive a market by restricting supply

    Umm, actually you do. How did OPEC get oil prices to go through the roof in the 1970s? Opening the taps?

    and you can have a very healthy market with increased supply and falling prices – think computers.

    Healthy market? Is that why IBM abandoned it and Dell is in very deep doo-doo?

  4. Of course they want to front load it – spending money now before the Tories get in AND it is a rare opportunity to get the state’s dirty fingernails into the housing arrangements of more people than would have otherwise been possible.

  5. “You don’t revive a market by restricting supply”

    You seriously think the answer to oversupply, is more supply?

    How would you treat an overdose? Administer more drugs?

    But to answer the question, the left has a single answer to every question: spend taxpayer’s money on it. Preferably a lot.

  6. During the Great Depression, to prevent deflation the US Government tried burning crops and killing livestock because it would cause food prices to rise. It worked, but then many people starved.

    Same goes for housing – don’t confuse affordability with need. People can need housing even if they can’t afford it. Last time I checked there were four million people on the council housing waiting lists.

    A glut of housing would look like our obesity crisis – many people having too many homes. That’s certainly not the situation we face today. Instead we have a famine situation, people want housing but can’t afford any.

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