THOSE BOVIS RESULTS: a triumph of political sleaze over national need

The ‘cheering news’ from the multiple builder sector this week is a classic case of crony capitalism in favour of Party supporters.

camflagptCameron….winning by making things worse

Bovis Homes has continued the recent run of ‘positive news’ from UK housebuilders this morning, announcing that profits will be ahead of market expectations. Both Barratts and Taylor Wimpey also said in separate statements this week that they expect to report ‘significant increases in full-year profits’. What’s more, Bovis affirms that, as of January 1 2013, it held forward sales for 2013 delivery of 778 homes – a whopping 37% up compared to 568 homes at the start of 2012.

For most people in the UK, the question on reading this will be along the lines of WTF is going on here? Margins are increasing, so they’re clearly not discounting are they?

A bit of it is being driven by the Bank of England’s Funding For Lending scheme pushing cheap money through banks and building societies to borrowers. But the real amounts here are relatively piddling: austerity measures and the eurozone crisis have been far more influential in the opposite direction.

The answer is that the multiple builder sector is doing it by cutting costs, and building in more upmarket and demanded places.

They cut costs by buying land when it was in recession. They’re cutting costs by screwing employees on wages. And they ensured more planning permissions by, as a sector, giving a £3.5m donation to the Conservative Party during the 2010 election. Eighteen months after that, Dodgey Dave the fixer relaxed planning applications. Well I never. It’s that leg up again.

Chief Executive David Ritchie says in a statement today, “Our continued strategy for growth through investment in high quality consented and strategic land” paid dividends, as did  “buying land cheaply during the recession, and building in south England where house prices have stayed strong.”

And hob-nobbing with the PM. Kerr-ching, Ithangyoo.

Meanwhile, during last October the Daily Telegraph reported that ‘Southerners are typically putting their homes on the market for £336,743, compared with £164,347 in the northern regions…..the £170,000 chasm is the largest in monetary terms since Rightmove’s house pricerecords began in 2002.’ House prices rose four times quicker in the South during 2012 than they did in the North.

This view was confirmed by thisismoney during December, when it recorded that ‘the imbalance in Britain’s property market was laid bare by official figures showing house prices were up 1.5% in the year – but more than half of the rise was delivered by London and the South East.’

So then, a nation of two halves, and overcrowding in the south east, made worse by the triumph of political greed over national need.

And the use of an effective subsidy for a struggling industry by a Government polemically dedicated to free markets and dying white elephants.

And the exacerbation of an overpopulation problem barely tackled by a Government that pledged in April 2010 to slash immigration immediately.

And another nail in the coffin of the countryside.

And a policy favouring Conservative voters in the South at the expense of Labour voters in the North. Because it’s a level playing field, and we’re all in this together.

That’s the way old Blighty folds, pop goes the Weasel.

Earlier at The Slog: Crash 2 – the Gathering Storm

20 thoughts on “THOSE BOVIS RESULTS: a triumph of political sleaze over national need

  1. spot on mate, the building industry is on its backside, 60,000 workers got laid off last year alone and has been in recession since 2007, workers wages have been slashed by up to 50%.
    These big housebuilders are run by accountants and executives in London and they are interested in one thing -profits ! for shareholders and mega bonuses for themselves, they have got to be cooking the books like the banks. see http://www.cskills.org/uploads/CSN_National_interactive_tcm17-33731.pdf page 3

  2. The illusion of ever increasing UK house prices must be maintained. It’s BofE and Government policy. The whole stinking mess is built on it. Anybody with half a brain cell should know that UK housings meteoric rise was nothing to do with demand, it was purely and simply credit driven.

    As I said above though, the property market must be maintained at all costs and that includes enforced forbearance by the banks – paid for by free money by the BofE. If there was a real correction in the housing market the banks would be underwater and the powers that be know it. As it is… there are thousands if not hundreds of thousands who are scrimping and scraping to pay the mortgage every month and that’s at record low interest rates.

  3. We copy the US in most things, but why not Property Taxes?
    Scrap Council Tax. and bring in a Property Tax of 1% of Property Value.
    Using Land Registry Values will do for 80% of properties.
    The can’t pay won’t pay brigade? Easy put a charge on the house so that the arrears are paid out of sale at current values.
    Poor old pensioners and/or low income, no problem, same answer as above.
    BTL Landlords, responsible for Property Tax instead of tenant and Property Tax is paid in full if property is empty or not. Or maybe just charge Business Rates?
    For good measure and fairness, let Local Councils keep all the money raised via Property and Business Rates. Good grass roots democracy.
    Leaving the Government with VAT, Nat Ins, PAYE, R/Tax and non existent Corporation Tax to finance its Wars, Police, Justice and Prisons, Foreign Aid, EU, Pensions and Benefits, things that are in the National Interest.
    NHS to be funded 50% from Central Government and 50% from Local Government, run with a Local over-site body body 30% local Councillors, 30% Hospital Staff, 30% Local People who want to be involved, the remaining 10% Local MP’s.

  4. As Donald Fagen said, in one of his more accessible lyrics: “Hot lips and rhetoric don’t count much for nuthin’.. ” Guess who’s going to be left with the giant dildo.

  5. Spot on JW and very topical ! Our local rag this week has a big double spread on Green Belt land within a mile or two, that our Council have identified as ‘Suitable for Development’. It’s been given a posh name called a Strategic Housing Land Availability Assessment.

    I shall in future call it SHLAA Law and put my NIMBY hat on again.

  6. Lupulco – The ‘government’ are proposing a new property tax. It is called the Community Infrastructure Levy or CIL. Local Planning Authorities (LPAs) (which is usually but not always the same thing as your local Council) have until 1 April next year to implement it. It will replace the current Section 106 contributions developers sometimes (and often, don’t) make to LPAs towards local services (usually schools and highways). CIL is a per square metre charge on development, usually residential. Only half a dozen LPAs have CIL after already jumping through the bureaucratic hoops. Local planners are implementing this fiscal wheeze, which is a bit like asking nurses to combat rioters. There’s probably only half a dozen of them in the country who’ve twigged what’s going on here.

    supafeckinmingster – its not that Councils or Councillors are necessarily corrupt; some are of course, but most aren’t. However, the killer is that most of them are real or third second raters; often completely out of kilter with their own national party, completely unimaginative and petty.

    Would I trust them to do what you outlined? Not a f*cking prayer. As Sir Humphrey said of the Nottingham airport proposal “complete amateurs”.
    After 10 years in Local Government, I have to say, he was dead right.

    In essence, local planning can be summed up in total as ‘has the LPA got a 5 year supply of housing’. As from 1 April this year, if it hasn’t, and most haven’t, then its screwed, and I can personally guarantee a load of shitty housing coming your way. The NIMBYs often make a lot of noise, but its an essentially doomed (and hypocritical) war-cry.

  7. Somebody ought to tell local planners the rules have been relaxed. As far as I can see its just been more empty rhetoric from Cameron. Oh and this building over of the south east- what a crock. Take a small plane up and see how much country side has been covered over. Less than 5% I would estimate. Even London and greater London is tiny.

  8. No mention of local housing authorities in this?

    Buy a load of land, put in the government mandated social housing % of the development first, but leave the private housing (bar a few Halo effect show homes) till last

    Sell the rabbit hutches with no discount to the LHA, this will pay for the initial land costs, so you can let the other plots lay fallow. Of course because the rest of the development “sold out” you can claim via some accounting tricks the fallow plots will realise the price of the few show homes you built.

    Now you have magnified the land value of those fallow plots, and they appear as assets on your balance sheet, even though on the open market with a completed house sat on them you would have to discount to sell them all.

    Simples.

  9. Pingback: At the End of the Day | The Slog. 3-D bollocks deconstruction

  10. Pingback: UK ‘housebuilding boom’ scam: ignoring the foreseen ramifications does not render them unforeseen. | The Slog. 3-D bollocks deconstruction

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