BLOG : Staying positive as storm clouds gather

06 Sep 2010

 

Housebuilder magazine's new industry SWOT analysis is out and I really want to focus on the Strengths and Opportunities, not the Weaknesses and Threats. I want to highlight the variety of the Opportunities cited by our expert panel, including the possibilities of investing in the intermediate market, of forging new partnerships, of buying land and of improving profile. And the Strengths of the industry are worth noting - its growth potential, low mortgage rates, lower costs.

But as much as I would prefer to dwell on these, in truth the Threats look a whole lot more interesting - and I mean interesting in the Chinese proverbial sense. It is no great shock that our experts rated the government's new localism policy as the leading Threat. But what is surprising is that this issue was not a runaway leader. It took 24% of the votes, while in second place - with 22% - was the Threat imposed by spending cuts and in third place (15%) was rising inflation. Then came rising house prices, rising interest rates, unemployment and the double dip.

This is an industry spoilt for choice when it comes to Threats. In any normal time the localism agenda would win this category hands down. But there are so many other clouds on the horizon that they look set to merge into the perfect storm.

The Construction Products Association has just forecast a double dip for construction and the FT has revealed that new homes reservations have slumped. Add into the mix Leicester City's appalling start to the season and the crisis looming over cricket match fixing and it is proving hard to stay positive, I can tell you.

But I AM staying positive. Nearly every industry analyst, journalist, builder and trade federation agreed that it was going to be a bumpy ride back. Perhaps we all secretly hoped we were wrong. Perhaps we mistook a brief upturn for a recovery. But we ought to have been prepared for a difficult time ahead. So ask yourself this. Would you swap the way you are feeling about the industry and the economy today for how you felt two years ago as we headed into the Lehmann Brothers days. Remember how we felt then. Remember the level of uncertainty and predictions of catastrophe. It's not like that now. Things are definitely better.

So let's go back to looking at those Opportunities....

Comments

Comments: 4


Certainly true about the position being better now than 2 years ago. I'm with the positive attitude as this will help lift every aspect of the industry...
Michael Gregan
on 06 Sep 2010
at 11:29
I really think the Government can do a lot more to help first time buyers without any cost and with a risk that it has the power to manage. In the Guardian on Firday 10th September, Steve Morgan of Redrow urges the Government to provide mortgage indemnity for first time buyers which I also suggested in my "Last Word" on page 54 of the months edition of Housebuilder Magazine. I totally agree with Steve. With a monopoly on the granting of permits for development, the Government is in a position to control the supply of land which is the key driver of house prices. As the major risk in providing mortgage indemnity is a fall in house prices, the Government is best placed to hold this risk, because it can, through the supply of permits, control it.
Mark Oliver
on 11 Sep 2010
at 08:46
Lets be positive! Lets get the Government cuts behind us all and then start moving forward again - one step at a time rather than a mad dash and we all trip over. But come on Government support this industry and the economy will surely recover more expediently.
james bullock
on 23 Sep 2010
at 12:49
It will illuminating to see how Shapps believes that giving local planning authorities the power to supplement their council tax take by agreeing to allow more home building is going to overcome NIMBYism across Southern England where the need for new homes is most acute. Hopefully Ben or someone will ensure this direct question gets a proper answer at the HMi conference.
Graham Holliday
on 11 Oct 2010
at 13:34

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