UK ‘housebuilding boom’ scam: ignoring the foreseen ramifications does not render them unforeseen.

harryisyc“Yar, well…I saw you coming you see…”

Further to last week’s Slog post about false optimism in the new homes sector of the UK property market, here’s another stage in the talk-it-up-bollocks saga: from today’s Telegraph City briefing -

‘A double boost for the housing and stock market this morning. Housebuilder Crest Nicholson has confirmed it is to float on the London Stock Exchange.’

Excellent. So just four days after the government-massaged house-building PR from Bovis et al, Crest announces a flotation. Hmm. Potential investors should read the rest of the release carefully (my emphases):

‘The move comes five years after the company was taken private at the height of the property bubble in 2007. Crest plans to raise £50m to repay debt.’

Right, yes, well…that all seems very straightforward: I want it all to be my money in the good times, and use somebody’s else’s money to pick up the tab in the bad times.

There’s one born every minute.

14 thoughts on “UK ‘housebuilding boom’ scam: ignoring the foreseen ramifications does not render them unforeseen.

  1. …and clearly, they don’t have sufficient land in their land bank to be able to sell and clear their debt that way. Not an investment for me, I think.

  2. The number of new houses being built in the North of England is beyond belief.Crosby,North Liverpool,new houses,Boston Spa first tranche of new houses are complete with similar numbers to be built in satellite towns and villages around Leeds and Manchester you would think was a boom town.In the Midlands,around Nuneaton a boom in building is occurring.So where is money for these new houses and the jobs to support the mortgages?

    • It’s the same in Kent – small flats in unattractive locations that are too expensive for first-time buyers and unappealing to existing homeowners. Contrary to the headlines, there is no shortage of new property, but a shortage of people who are able or willing to buy them. Also there are many older houses on sale for months.

      • We’ve got stacks of houses that have been on sale for a year or more round here. We’ve even got a whole street of so-called affordable housing that was finished two years ago and three quarters of it is still unsold because despite being called ‘affordable’ it has been priced on house prices at the 07/08 peak and since then not only have house prices collapsed, but all the well-paying manufacturing jobs have gone and adult unemployment locally is in excess of 25%. We’ve even got loads of land that was cleared for building years ago just sat there doing nothing.

  3. Some were built on a rock, some were built on sand, and some were built on a new composite material: part quicksand, part methane, part hubris and all b*ll*cks.

  4. “From lower interest rates and quantitative easing to almost forcing banks to lend, the government seems to be doing everything in its power to engineer a bounce. Cynics would say it’s ‘just in time for the next election’. But it’s a mistake to buy now….
    Beware – we are entering a bull trap
    ……one of the favourite charts ….Dr Jean-Paul Rodriguez ‘Manias and Bubbles':
    http://www.scribd.com/doc/13176303/Stages-in-a-Bubble-UK-Housing-Prices

  5. It says it all, this hoped for IPO for Crest, with the banks swimming in cash from QE pumping they are obviuosly unwilling to invest for any length of time in a mere £50 m request.

    UK banks have for too long been short term spivs.

    The UK needs banks to mold themselves on many German banks that historically have appeared as long term partners to the productive industrial companies of Germany.

    Unfortunately Deutche bank has of late appeared to try and mold itself on the pseudo casino banks of UK and US.

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