When asked to do this blog I had hoped to steer clear of indulging in raw comment. But, even as cynical as I have become as a journalist over twenty odd years, I had not expected to encounter such fundamental ignorance and dithering as I see within Government ahead of an impending crisis.
Let's keep it simple and ignore the fine detail.
Here's some background:
Point one: The Government says there is a desperate need for more homes.
Point two: There is a bunch of desperate sellers looking to shift brand spanking new homes at knockdown prices, say 20% or more below their expected market value when building started.
Point three: Construction costs are rising. It will in future be more expensive to build homes, as commodity prices continue to rise with global demand.
Point four: If a sizeable proportion of these homes is not mopped up rapidly (and it may already be too late) there will be a collapse in the house building industry from which it will take years to recover. The collapse in fairness is underway, as schemes are halted and employees sacked.
Point five: There is a readymade framework (housing associations etc) for buying many of these homes (at least those that meet Housing Corporation standards) and delivering them to the market either for social or market rent or for part or full sale. The social housing sector sees great opportunities in the current market, as is clear from recent noises made by both the Housing Corporation and the National Housing Federation.
Point six: Demand for rental housing has risen sharply and market rents have (at least in the short term) risen recently.
Point seven: There is much talk of private investors out there eagerly waiting to pounce on deals in the market. Some are thought to be waiting for the market to bottom, but they might be prompted to act with more haste and buy up unsold stock if they see the RSLs buying with more vigour.
Point eight: Investment in housing in the long run has proven about as safe as you get (on capital growth alone you are looking long term at retail price inflation plus 2 to 3%). So the public funds would be pretty safe - on the face of it a far safer bet than Northern Rock.
So what is the Government waiting for?
If it can find £2.7 billion to save its political face over the 10p tax squabble, if it can nationalise Northern Rock, surely it can act to spare the nation a potentially worse fate and the meltdown of a strategic industry.
What precise mechanism it chooses to allow RSLs to mop up unsold homes is up for grabs, but the Government must act swiftly.
Be clear, I am not pleading on behalf of house builders. This should not be a sop to them. Such a measure will only have limited impact and will not solve their problems. And to put it bluntly, their fate in the market is their concern.
This is an investment, a sound business opportunity to buy homes more cheaply. And it would be a strategic move by the Government to avoid dashing any hope of meeting its proclaimed targets for delivering 3 million more homes.
Failure to act now is highly likely to result in far greater cost as the nation attempts to rebuild is house building infrastructure.
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