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Friday, September 27, 2013

Welsh Labour's housing failures comes back to haunt them

In many ways the decision by Persimmon Homes not to build any more houses in the Welsh Valleys north of a line based on Pontypridd is unfortunate, but unsurprisng. House prices in these areas have long been lower than those in more prosperous parts of Wales and consequentially profit margins have also been tight. Add in extra costs, as the Welsh Government has done, and the venture becomes uneconomic.

The Welsh Labour Government was at it again yesterday, this time piling additional costs onto hard-pressed homeowners who want to improve their homes. The Housing Minister has announced that he intends to change a section of building regulations so that anyone extending or improving their homes, including loft and garage conversions, will need to meet “improved fabric standards” for walls, roofs and floors, as well as “consequential” energy efficiency improvements to the building.

He has proposed that these improvements should incorporate minimum standards of loft insulation, cavity wall insulation and a minimum standard of hot-water cylinder insulation.

In an ideal world this might be a satisfactory way of improving energy efficiency but we are in the middle of a recession and in my view piling additional costs onto homeowners at a time when they can least afford it. If the Welsh Labour Government is going to insist on this then they should provide suitable grants to pay for the work.

We also finally learned yesterday that the Homebuy Cymru scheme is dead in the water. This is the scheme which was agreed with the Welsh Government about 18 months ago as part of their budget deal with the Welsh Liberal Democrats. The idea was that the Government guarantee deposits on viable mortgages so that first time buyers can get on the housing market.

They reneged on that deal when they abandoned the scheme five months ago and have told us since that they have been trying to ressurrect it. Yesterday though the Council for Mortgage Lenders said they were not interested in engaging in this scheme as they preferred to work with the UK Government's plans instead. The UK shared equity scheme will apply in Wales from January 2014.

This decision means that Welsh first time home owners have been left high and dry for nearly two years whilst their equivalent across the border have enjoyed support to buy their first home under the existing Enhlish help to buy scheme. Builders are also disadvantaged as demand for their product has been consequently suppressed in Wales meaning fewer homes being built.

This is a major failing by the Welsh Government who are increasingly looking out of their depth on housing policy.
It should also be noted that the announcement comes the day after Cardiff cleared the next step in releasing huge amounts of land for new housing, because massively increasing the land supply outside the Valleys doesn't destroy the potential for using land in the Valleys, oh no...
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