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Wednesday, February 27, 2013

A worrying development for Welsh Government

The statement in today's Western Mail by Redrow chairman Steve Morgan that it is harder to build new homes in Wales than in England is worrying on a number of levels.

Mr. Morgan told the paper that the stimulus to the new homes market evident in England is not being seen in Wales because the Government-backed NewBuy scheme for people with small deposits was not available and there are no plans for an equivalent of FirstBuy, which helps first-time buyers get on the property ladder.

He added that this situation is being compounded by increased build costs in Wales due to planning and regulatory burdens, which he warned will get worse if changes to building regulations take effect.

Now I am sure that the Welsh Government will dispute some of that but there is no doubt that the huge and unforgiveable delay in launching their mortgage guarantee scheme under the NewBuy label is helping to depress the housing market in Wales and is preventing many people getting onto the housing ladder in the first place.

That NewBuy scheme was forced onto the Government by the Welsh Libeal Democrats as part of a budget deal over 10 months ago and yet the latest indication we have had of it being available to applicants and builders is a letter from the First Minister which talks of a summer launch. The lack of political will and foot-dragging on this scheme has been a disgrace.

The issue of regulation is of course a matter of perspective, however the fact that the perception is there that Wales is a difficult environment in which to develop new homes means that the barrier becomes self-fulfilling. The key to housebuilding investment is confidence and if investors and builders believe that it is more difficult to build homes in Wales or that they will get less profit if they do so, then they will go elsewhere.

That is a problem the Welsh Government need to urgently address.
There seems to be a Welsh/British disease 'to do with' housing - that it is imperative to own your house. Why??? Just leads to boom and bust cycles - the USA aped the British mania and BOOM or rather BUST. The focus of all the political parties MUST be on promoting manufacturing geared to exports. People need to live, but they also need jobs - and the UK economy is going down the pan while countries like China are booming because they are focused on manufacturing geared to exports. Germany has houses yes, people living in houses, but also policies that promote manufacturing geared to exports. And Germany is the powerful country in the EU - what a surprise (not) that is.
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