The uncritical reporting by some British journalists -- in this case, Emma Rowley from the Daily Telegraph -- never ceases to amaze me. She's covering the speech of Steve Morgan from housebuilder Redrow at the RESI conference:
"Financing is the problem, the biggest issue of the day, but even if we were able to overcome the finance issue, planning is a massive obstacle," he said. "It's outside of London, where the principle of development comes into question."I bet he did. Oddly, it seems that banks are happy to lend at bargain-basement rates to those with substantial equity in their properties. This doesn't smell like a balance sheet problem. Rather, it bears all the hallmarks of the banks believing that a) residential property is overvalued and b) overextended home purchasers are likely to default on their loans.
He called for more Government support for the housing industry.
Gah! I don't blame the housebuilders for trying to snaffle more Government cash, especially as current and past governments have been so willing to provide it. What I do resent is clowns like Ms. Rowley failing to do basic journalistic due diligence and challenge the housebuilders' assertions. Just how is the print media conducting indispensible journalism, again?
John Hoad from the Campaign to Protect Rural England is at it as well:
"The real problem is market failure," he said. "As a society we can't seem to create the situation where we value housing enough to invest in it long-term."Wrong, John! We've created the situation where housing is overpriced, and now people can't afford and aren't prepared to buy it at that price. If there's a functioning market in a commodity, and the clearing price is below that which you think is correct, it's unlikely that the market itself is wrong. The CPRE wants to safeguard green belt land, thereby keeping high the price of houses at the edge of that land (the marginal commodity). If the Government plans to simplify planning permission go ahead, contrary to the CPRE wishes, those house prices will fall. Just how is that a problem?