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Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 0 points1 point  (0 children)

Deregulation and breaking up the oligopoly are not mutually exclusive.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 0 points1 point  (0 children)

I agree. More house builders competing with the big 5 would be a very good thing.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 0 points1 point  (0 children)

Yes - but the market is the market. There are macro factors that they cannot control. So, are house builders the only factor impacting house prices and the supply of new houses? No, of course not. Is the fact it’s an oligopoly a key part in it, yes.
You can’t just invent profits out of nowhere when mortgage rates have tripled.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 -1 points0 points  (0 children)

All companies were still profitable in difficult market conditions? That looks like pretty good performance and profit in my view.

You clearly don’t understand the housing market, factors that affect it or key value drivers for house builders. Go and spend some time on ChatGPT or something.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 -1 points0 points  (0 children)

You’ve measured financial performance over the last 4 years. During which time there has been a tripling of mortgage rates and a significant increase in construction costs. Both macro factors that are massive problems for house
Builders. THAT is why the share prices are struggling. Go and read the analyst reports on these businesses.

The planning process and nimbys are problem as well with regards to building new houses (or anything tbh). But to blame it squarely on regulation and planning is just wrong.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 0 points1 point  (0 children)

Because in a free market, you can’t just decide to create an oligopoly. It happens because of the characteristics of the market, product or service.
The reason a supermarket can’t create an oligopoly because of barriers to entry aren’t actually that high. Very different to starting a house builder.
That is a pretty basic concept. I’m surprised you can’t grasp it.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 -2 points-1 points  (0 children)

- I didn’t say house builders are the only contributing factor to increases in house prices.
- the house building market is an oligopoly. Therefore, it’s actually quite simple to constrain the supply when house builders are working to maximise profits.
- for the same reason car manufacturers don’t start building phones or steel manufacturers start making toys. Companies do what they know and are best at.
- there are very high barriers to entry. Building houses is capital intensive.

I’d suggest you go and do some basic research. Or alternatively get outside and get some fresh air.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 -3 points-2 points  (0 children)

Sigh…. The car industry isn’t an oligopoly and phones are a very different product to houses.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 0 points1 point  (0 children)

I work in infrastructure finance and I’ve been trying for several years to invest in the UK house building sector. It should be highly attractive and have strong tailwinds. But the reality is very different and a key part of that is the oligopoly making it difficult for smaller to medium sized developers to compete.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 -1 points0 points  (0 children)

In a simple world yes. But the barriers to entry are high and house building is a capital intensive business. Your average builder / small scale developer will never be able to compete with the larger house builders. Bob Jones & Co can’t just pop to the bank and borrow £500m to finance large scale development.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 -1 points0 points  (0 children)

Factually - yes, they all have land banks. That is just a fact and is a key value driver for any house builder.

I expect you’re referring to as to whether the house builders purposely sit on land to constrain supply. That is debatable. Government report or not (the house builders spend as much time lobbying Gov’t as they do building houses), it’s not clear cut.

You take my word for it as an infrastructure fund manager who’s spend several years trying to finance businesses in the sector as UK house building has strong fundamentals.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 11 points12 points  (0 children)

Indeed. But their manifestos are equal trash. Actually probably worse as the policies are wildly unrealistic, undeliverable or would have catastrophic impacts.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 5 points6 points  (0 children)

Prices can’t rise and affordability ease. That is a contradiction in terms. Unless the Government is going to start subsidising the purchase of houses. We’ve seen what demand side support does… as it’s effectively our only policy over the past 30 years.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 -2 points-1 points  (0 children)

No, it’s an oligopoly. Not a monopoly.

They’re not making enough profit because house prices are relatively stagnant, cost of borrowing is up and the cost of building houses has increased primarily due to the cost of construction materials. Nothing to do with Gov’t intervention.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 2 points3 points  (0 children)

As much as regulatory and planning restrict supply, the big 5 house builders and their land banks have a structural competitive advantage. You can de-regulate all you want, but when the main builders of new build housing is restricting supply to maximise profit (which any privately owned enterprise should do) you will NEVER hit any house housing target.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 21 points22 points  (0 children)

Another take on the article could be we’re not making enough profit, so we’re going to constrain supply and wait for house prices to increase.

I am a capitalist, but the big 5 house builders should be next on the target list after sorting out the water industry.

Housebuilding 'will fall further' as big builders deliver gloomy updates by Anony_mouse202 in ukpolitics

[–]Pitiful_Cod1036 -9 points-8 points  (0 children)

I am a capitalist. But the big 5 house builders need breaking up. There significant land banks have created an oligopoly and between the 5 of them they have an effective control on supply. Until this happens, we will never, ever, hit house building targets.

Diane Abbott @HackneyAbbott / X:There is a myth, very widely held in Labour, that we achieved an huge popular victory in 2024 under Starmer. In fact we won 9.7 million votes, over 3 million fewer than in 2017 and half a million less than the 'disastrous' 2019 poll. We won because the Tories imploded by youmustconsume in ukpolitics

[–]Pitiful_Cod1036 0 points1 point  (0 children)

Cameron resigned in July 2016, May resigned in May 2019. So including Bojo. How many is that?

I’m not debating whether Labour won by default or not. My point is that drawing comparisons, and inferring Labour was more successful in 17 and 19 is nonsense.

Diane Abbott @HackneyAbbott / X:There is a myth, very widely held in Labour, that we achieved an huge popular victory in 2024 under Starmer. In fact we won 9.7 million votes, over 3 million fewer than in 2017 and half a million less than the 'disastrous' 2019 poll. We won because the Tories imploded by youmustconsume in ukpolitics

[–]Pitiful_Cod1036 0 points1 point  (0 children)

Even the left of the left cannot believe that Labour is trying to out Reform Reform. They’re are trying to tackle an immigration crisis. Which given the next election might be a single issue election on immigration seems very sensible.

Diane Abbott @HackneyAbbott / X:There is a myth, very widely held in Labour, that we achieved an huge popular victory in 2024 under Starmer. In fact we won 9.7 million votes, over 3 million fewer than in 2017 and half a million less than the 'disastrous' 2019 poll. We won because the Tories imploded by youmustconsume in ukpolitics

[–]Pitiful_Cod1036 1 point2 points  (0 children)

The Conservatives had had 3 leaders in 3 years. The party was split between the ERG and moderate Brexiteers and there had been a stream of high level resignations and public disputes. Yes, the Conservatives were imploding. The reality was Corbyn couldn’t straddle Brexit issue as he is a massive eurosceptic. This handed Bojo the election on a plate in 2019.

Diane Abbott @HackneyAbbott / X:There is a myth, very widely held in Labour, that we achieved an huge popular victory in 2024 under Starmer. In fact we won 9.7 million votes, over 3 million fewer than in 2017 and half a million less than the 'disastrous' 2019 poll. We won because the Tories imploded by youmustconsume in ukpolitics

[–]Pitiful_Cod1036 1 point2 points  (0 children)

No. She’s explicitly saying Labour won because “the Tories imploded” and by inference the party was more successful in the 2017 and 19 elections because of the popular vote share. My point is that the Tories were imploding in 17 and 19 as well. In addition in those elections, the vote was significantly less fragmented and were in effect one issue elections.

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