The treasury report into the UK housing market "Review of Housing Supply" has accused the housing industry of being unresponsive on demand for housing and reluctant to develop "brownfield sites" i.e. sites in poorer areas.
The review looks at the shortage in supply of new housing and the fact that whilst demand is high, according to the report the market is three times less responsive to demand than those of the US and four times less than Germany.
The report also criticised the fact that land owners are holding on to land and not developing it.
Our view
Are they mad? Why would any developer sell off land or build houses in excess of demand to drive down prices? Yet again this is another Government (waste of money) report by people who have never run a business or have never put their own money on the line telling people in business who do, what they should do!
Our view is simple - let supply and demand take its natural course - building contractors must themselves exercise caution to protect their own businesses and jobs for employees by planning for peaks and troughs - not committing commercial suicide because the Government say so.
If Government want cheaper housing - they should buy the land, build the property and subsidise the less well off to live there instead of spending £5m on a US President's visit - this could have built a hospital!
Although we do want any visiting dignatory to be safe and stop giving themselves huge payrises and great big pension contributions each year! Most politicians and high ranking civil servants do not live in the real world.
If the Government, Treasury or Bank of England wish to slow down property inflation (which is sensible) they should increase interest rates and offer tax incentives to the lower end of the market.
The Government answer - criticise those who offer employment and create housing and offer nothing themselves!