BLOG : 2010? We'll win the World Cup and all will be fine

26 Nov 2009

 

 

 

It’s that time of the year. Budget time. Always tricky, but this time virtually impossible.

  

Working out how we are going to fare next year is some challenge. How do you gauge the market with the amount of uncertainty about?

 

 

Two recent major industry events are normally good benchmarks – the 2009 Housebuilding Innovation Awards and the NHBC’s annual lunch. And it is safe to say that the overall mood at both was much chirpier than last year.

 

At the Awards there was a feeling of optimism in the air and enjoyment of what was, after all, a night of celebration. This was in contrast to last year when people still came to have a good time, but there was an eve of war feel about it all – a last hoorah before the darkness descended.

 

The NHBC lunch attracts the great and the good of all aspects of the industry. Last year the event went well enough but the housing minister (Margaret Beckett, if you remember) cancelled at the last minute and good old Nick Raynsford read out her speech in her absence – all of which somehow reinforced the mood of the moment.

 

This year the lunch was much buzzier and the bars busier. The speaker was shadow housing minister Grant Shapps who brought energy and vitality to the occasion. He continues to peddle a party line that the audience does not like much, but at least the industry is looking ahead and debating the future, not wondering if there will be a future at all.

 

So on that basis it would seem that 2010 is going to be a better time all round.

 

But not everyone agrees.

 

Some quite sensible commentators are concerned about the outlook. They see a scenario in which mortgage supply continues to be constrained as the banks have to meet their own loan requirements so are unlikely to loosen the purse strings. At the same time they see the spectre of unemployment and the damage that will have on any nascent confidence in the market. They see the major housebuilders, while increasing output a little, settling on a build rate way below the levels of 2006 and 2007. They see a General Election and the uncertainty that this always brings to the market whatever the underlying trend. In addition to all this they see a clampdown on public expenditure that could bring an end to Kickstart and HomeBuy Direct and long term restraint on growth.

 

So how do I budget for 2010? Do I take on board the overall mood of optimism, factor in the gut feel and the ongoing resilience of the industry despite the potential obstacles ahead? Or do I listen to the more scientific interpretation of the problems ahead?

 

Blow it. I am going for the optimism for next year. And we’ll win the World Cup. And that in itself will lift the Autumn market for all of us.

 

Bring it on!

 

 

 

 

 

 

 

 

Comments

Comments: 3


"The government has confirmed that it is pouring(?) a further £290 million into building 5,500(?) affordable homes across the UK to ease waiting list pressures and boost the construction industry."

By my maths £290m for 5,500 new homes means an average amount for each dwelling of just £52,727! If that doesn't include land values, it might just about be 'do-able' for 5,500 apartments, but otherwise it implies a cut in standards - in fact it would be almost impossible to meet CSH Level 4 at that price.
Julius Marstrand
on 26 Nov 2009
at 21:12
Regarding the 5.9% increase in house prices in 2009 announced by Nationwide.

There are two primary factors in any market: supply and demand.

The primary reason for the increase in house prices is not increased demand, but the shortage being created by the massive shortfall in new building.

The reason that demand is not picking up much is not a lack of need, but because of the difficulty many people have in being able to obtain, or afford a mortgage, particularly the large deposits often required.
Julius Marstrand
on 31 Dec 2009
at 18:36
8,976 homes may be more than 40% up on the number of homes Persimmon built in 2008, but it is still only about half of what they were building before the 'credit crunch', after the take over of Westbury Homes.

Although they have "confidence in the long term future of the UK market", even Persimmon identify 'mortgage availability' and the 'general economy' as limiting current demand.

Both, but particularly 'mortgage availability' reflects continued failure of the banking system to meet the needs of the economy.
Julius Marstrand
on 07 Jan 2010
at 21:22

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