The housing market is not in best shape. From a muscular figure on steroids it has latterly resorted to being bed ridden bed and isn’t eating properly. Lethargy has prevailed. It’s underweight and looking rather sad.
In an effort to fatten it up the Department of Communities and Local Government have announced a spread of measures today backed by Prime Ministerial support. An Ocado delivery of healthy grub with DC at the wheel of the van, sort of thing.
The list is as follows:
£200 million for housing sites that will build properties for the private rented sector.
Loan guarantees to facilitate 15,000 more affordable homes plus 5,000 currently empty homes being brought into use.
£280 million in additional funding, matched by mortgage lenders, to help an additional 16,500 first time buyers find purchase deposits.
Identifying and selling off more public land for housing.
Cutting red tape and holding planning authorities to account on poor performance.
Converting empty offices into residential.
Allowing more ‘permitted development’ whereby home owners will be able to add extensions and conservatories without having to apply for plnning permission.
Some of these initiatives will prove more worthy than others in feeding the housing market, considered as one of the primary engines of our economy. Or at least it should be. Because house market buoyancy and confidence in rising equity bodes very well indeed for consumer spending and growth.
But stoking the property market is not just a government responsibility. It’s yours too.
A main factor responsible for the absence of home sales currently is the disconnect between seller expectations and buyer willingness. By that we mean that sellers are continuing to price high and buyers, ever encouraged by media, refuse to pay over the odds. The resulting reality gap stalemate between asking prices and actual sale prices is maintained at circa. 15% (Halifax sold prices vs Rightmove asking price index 2012) and has resulted in over one million properties remaining unsold and buyers sat on the sidelines.
Sellers and their agents need to be honest with themselves when pricing. Or else stagnation will simply continue. Failing to acknowledge that it’s a buyers’ market and that prices have fallen a little since 2007 (except in London) will only serve to frustrate those sellers and the market as a whole. It may well be desirable to want to achieve a particular price yet if the economics of supply vs demand prove otherwise, then wishing and wanting will not cut much mustard.
The Government does seem to be trying to kick start housing with this latest range of sweeteners. It needs some credit for that.
However until sellers themselves swallow hard and accept the inevitable, the hunger strike will continue.
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