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With every silver lining, there’s a cloud

To-day man puts forth The tender leaves of hopes; to-morrow blossoms, And bears his blushing honours thick upon him;The third day comes a frost, a killing frost

So, the CPA tells us that private house building starts are now growing at a faster rate than predicted even three months ago.

A year ago I couldn’t have imagined writing that sentence. A year ago we were still waiting for the recovery. A year ago we were still concerned about the – then – very real possibility of dropping back into recession for a third time (the ‘dreaded triple-dip’). A year ago we were experiencing some horrendous weather that put the kybosh on any building works that were planned.

Since then, however, we have seen the recovery take hold and then some. Help-to-Buy, when it launched in March, did much to boost the confidence both of house purchasers to buy and house builders to build (as I explained when I was interviewed once again on Friday for BBC Radio Lancashire’s Drive-time show. *smug face*).

So much has that recovery taken hold that the CPA has revised its forecasts for housing starts from October’s figure of a 19% rise to 24%, taking the number of housing starts predicted up to 116,601 in 2013. The organisation’s forecast for this year is for private housing starts to rise a further 16% and a further 10% in 2015.

Hooray. Welcome news indeed.

However, the devil’s in the detail as usual and that 116,6021 is woefully short of the numbers needed to even go a short way towards solving the problems of the housing market in this country. Also, as the redoubtable Dr Noble Francis, economics director of the CPA (and author of the best headline about industry statistics EVER) points out, Help-to-Buy stops in 2015 and that means there are “strong concerns about whether house building will continue to improve despite the clear need for new housing.”

Exactly. When a massive amount of business is generated via Government initiatives and subsidies, any industry that doesn’t have a Plan B is storing up trouble big time. See the issue of ECO and ‘green levies on energy bills’ for example.

And bearing in mind what George Osborne said the other day about needing a few more years of austerity to really sort the deficit out, we shan’t be looking to the public sector to make up the housing shortfall. The CPA reckon that public starts will rise a nominal 2% this year and next year.

Unless of course, there’s an election and Osborne is just saving his cash now in order to bung it into pre-election promises to persuade the electorate to vote the Government back in. But what are the chances of that?

About Fiona Russell-Horne

Fiona Russell-Horne
Group Managing Editor across the BMJ portfolio.

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