Building doubts

9:29am Tuesday 1st May 2012 in Letters

“CONSTRUCTION can offer a route out of recession” says the first letter in your edition of April 27. Perhaps, but I doubt it.

In the UK and the US, it was mad property construction, real-estate speculation, and the resulting boom and bust that put us into recession in the first place.

Both governments ran tax policies that fuelled the speculation but neglected boring activities such as making things which could be sold on the world’s markets. Who needs to make things when we can import them from China? Who cares? The kids will pay the bill.

The third letter in the same edition notes that “amid all the doom and gloom within Europe, Germany still shines supreme”. Coincidence? I don’t think so.

While the British and American economies were building McMansions, mortgaged and remortgaged up to the hilt and beyond, many Germans were renting relatively modest apartments and manufacturing stuff: stuff that customers around the world wanted to buy.

They were also financing their students from taxes rather than loading them up with debt while doing little or nothing to ensure that they had jobs waiting.

Brian A Jones, Clinton Street, Brooklyn NY, USA.

Comments(8)

Mr Crabtree says...
10:25am Tue 1 May 12

Has Brian forgotten that we have a massive housing shortage ?

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Mr Crabtree says...
11:20am Tue 1 May 12

Sorry, just noticed Brian is in the USA, perhaps he didn't know about the housing shortage here ?

As I understand it, the USA were left with an overhang of empty unsold housing stock, but, in the UK, it wasn't as bad, and we were not building more than we needed.
The latest figures for the USA give starts at 654,000/year and consents at 747,000/year. The UK had 132,000 consents in 2011, and with our population at 20% of the USA's, their consents are running about 13% higher.

Brian's point about McMansions doesn't exactly ring true for the UK, as we were building a lot of city centre apartments, rather than family houses. His point about manufacturing is however very true.

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Joey Rancor says...
12:45pm Tue 1 May 12

There isn't that much of a housing shortage, except in council housing. The reason is that there are too many who know how to fiddle the system to get "a free" house. I have seen there are doctors, lawyers and school teachers earning more than me who get a council house becasue they've wraggled the system. One I know who used to have a council house had a house in Nottingham to rent at the same time.

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far2bizzy says...
1:43pm Tue 1 May 12

Mr Crabtree wrote:
Has Brian forgotten that we have a massive housing shortage ?
There are more bedrooms in this country than there are people. That doesn’t sound like a 'massive housing shortage’ to me. Simply a case of the wrong people in the wrong place.

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Mr Crabtree says...
3:30pm Tue 1 May 12

far2bizzy wrote:
Mr Crabtree wrote: Has Brian forgotten that we have a massive housing shortage ?
There are more bedrooms in this country than there are people. That doesn’t sound like a 'massive housing shortage’ to me. Simply a case of the wrong people in the wrong place.
You cannot legislate against that. We all have freedom of choice to buy a property with more bedrooms than we need. The spare rooms are also for other uses; guests, office, etc. Some people have more than one house but you cannot force them to sell all but the one they live in. Using the argument of more bedrooms than people does not change the fact that there is a housing shortage. No matter how much people dislike the thought of new housing being built, they have no choice than to accept that they will be built. Housebuilders will only stop when there is no demand, or, where it is not viable, like in York !

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BAJNY says...
1:27am Wed 2 May 12

The key to the problem is, to repeat, that “both governments ran tax policies that fuelled the speculation” and boosted the real-estate sector to an unjustified dominant position.

I am not against building homes for people, but you cannot export them. A balance must be struck. Germany has done so and has remained a leading exporter; the US & UK have not.

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sperare e coraggio says...
7:38am Wed 2 May 12

"Houses cannot be exported."
So what?
That doesn't alter the fundamental point that a surge in house building would get the economy moving again. All previous post war recessions have ended when speculative builders started putting up houses. This in itself created jobs and demand for materials. The purchasers then bought carpets, curtains, white goods etc and the economy was rolling again. But in previous times builders were not hamstrung with unworkable regulations which made building unprofitable. They did not have to cope with horrendous Building Regulations, unaffordable sustainability codes or a planning system which blackmailed them into giving away homes to replace lost council housing.
Nevertheless, building our way out of recession is the best hope. If the government would just get a grip and release the regulatory stranglehold those builders still breathing would return to the market; we would have more jobs, more homes and a genuine recovery.

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YorkToff says...
11:38am Wed 2 May 12

The government should compulsory purchase landlords with bulk properties at base price and then offer them for low rent to people.

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