the Power hour
mBe 2011 Power Hour: all bets are off
Britain’s housing market is still frozen solid and events in Europe are doing nothing to thaw it. Just ahead of the government housing strategy announcements, our panel of experts discuss what would help housing and what a eurozone break-up might mean for the UK
Why is neW build struggling? Simon Embley: If you look to most of the homebuilders today they’re seeing reasonable and growing returns because they’re building in the right places with the right spec. If they built more they would be losing money because they would be building on a speculative basis.
is that because of a lack of finance for neW build? SE: That’s a part of the reason, the other is house prices. It’s difficult to see how young people can get on the housing ladder without house prices crashing. Tony Ward: You can’t just look at one side of it from a house builder’s perspective. You have to look at it from a whole and fix it from a whole. You can take the view that there is this structural shortage of housing which will maintain demand at a level and say it’s unsatisfied which will underpin house prices. I still see demand is low and is likely to remain low as effects from the eurozone will spill over into the UK. Fionnuala Earley: It’s absolutely a confidence issue for the consumer side of things. At the moment we’re seeing some
Simon Embley, chief executive at LSL Property Services
increase in the number of enquiries but also an increase in instructions. This is still at quite a low level and levels of transactions are so low that you’re not getting to the critical mass to get the market moving. Without that you’re not
36 mortgage introducer DECEMBER 2011
going to get confidence and consumers will still expect prices to fall. They’re not
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