Saturday, September 04, 2010

UK HOUSEBUILDING: THE PHONEY WAR

As Summer draws to a close, and with a new government now in place, the resumption of what can only be described as a "phoney war" by the UK's large scale housebuilding sector, and its adherents, has once again gathered momentum.

Historically, the big beasts of the UK housebuilding industry have enjoyed some of the highest profits in their sector, based upon international comparisons. This has led to calls from the wider development business, as well as consumer groups, for the industry to be better regulated.

However, whilst some anti-competitive practices amongst major housebuilders and construction groups have been identified, notably with regard to price fixing in public procurement, much of the sector remains, quite simply, unreconstructed.

One of the main reasons for this is the industry's unrivalled public affairs infrastructure, which is supported by organisations like the Institute for Housing and the National Housing Federation, who have a remarkably uncritical relationship with commercial construction interests.

Both these reputable organisations should know full well that commercial house builders are not going to develop more houses than they can construct, sell or rent at a profit - notwithstanding any affordability or social subsidy component - for the market.

The fact that the UK market is delivering an all time low number of dwellings at present is, to put it simply, "the nature of the beast", or more accurately, "the nature of the big beasts"; and all the rhetoric around this reality little more than a phoney war.

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