British Government Increases Planning Fees - (01/08/2014)
The Government must be fairly happy with the progress of the economy as the increase in some planning fees must be seen as a positive indicator. If the economy was faltering then surely this would not be an option. The grumble I have is the almost continual press hype regarding the increase in house prices. There has to be a more responsible and balanced view taken by all. The housing market in London is very strong and increasing on a weekly basis, however, outside the London area it’s a completely different kettle of fish ! As a company we undertake work pretty much across the country from London, along the M4 corridor then up to Shropshire and down to Cornwall and the one thing we have noticed is the disparity between the markets.
I think the economy is doing better and is progressing in the correct direction. However, I hope the Bank of England does not react to the press or political persuasion (as the elections are looming !) and use an increase in interest rates to ‘slow’ the housing market. The London market has to be treated separately and interest rates not used to cool this particular segment of the market. A large proportion of London properties are being purchased by either cash-rich or overseas investors who are not affected by UK interest rates. It will be ‘Joe Public’, the poor souls that do have a mortgage, who can’t afford too much of a hike in rates that will be hit.
What the government should do is set up an ‘arm’s length company’ to procure and construct housing which can be rented to workers on an income of less than a certain figure. However, they must create hundreds of thousands of these units in and around London, not use housing associations and keep the set-up separate from all/any political persuasion - it must not be ‘tampered with’ by government officials. The housing should be split into two sectors (70/30 split) with the 30% for low/no income families and the 70% for families/people who are in employment and paying tax back into the system.
We have to move away from what appears to be the blanket approach of giving council housing to people on benefits. We have to give more support to those on low wages, by getting wage earners to pay a rent to the government then the whole system becomes cash positive, whereas currently people are given benefits by the government to pay the housing associations and private landlords rent thus creating the government cash drain ! The government (ultimately the tax payer) cannot afford to keep the current model in place - it’s broken, as shown by the current London market. This is not a rant against those on benefits (that’s a case of ‘by the grace of god it’s not me’), it’s about creating a system that will/should benefit all in society.
If the government think they can increase the supply of housing to the open market by ‘relaxing planning’ then they are equally deluded. Someone in government must recognise that all major house builders are in business to make as much money as possible for themselves and their shareholders. They will not increase supply beyond what they consider acceptable/profitable as this will mean lower prices (I think turkeys voting for Christmas is comparable). House builders have a complete conflict of interest with what the government need to do yet they manage to have senior figures from their companies within the Government ‘steering groups’ ! Oh well some things never change and never will!
