Hot off the press today was the story that indicates a national brick shortage;
"Britain's chronic brick shortage is ramping up house prices and the situation could be made worse by the Brexit vote, a new report has warned.
The supply of the vital building material is failing to keep pace with the demand for homes, exacerbating Britain's housing crisis, according to t he National Association of Estate Agents' (NAEA) Bricks Report."
Strange that... exactly the same situation happened last year;
"UK brick shortage will prolong housing crisis - Shortage of bricks and bricklayers is threatening future house building projects, Federation of Master Builders warns
Read more: http://www.telegraph.co.uk/finance/economics/11565540/UK-brick-shortage-will-prolong-housing-crisis.html
Seems the latest craze is to blame BREXIT for everything ....?
Especially strange given that several major developers (
Persimmon & Charles Church) have posted record H1FY16 results ......
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The 'brick shortage' may not be what it seems.
Have a read of this from 2014: What brick and block shortage? What house-building boom?
I remember the impact of the building boom of the late eighties.
Producers kept producing materials and pushing these materials out to yards and direct to building firms. Often on long credit terms.
When the crash came these producers not only had surplus stock but builders were also went bust. Also merchants refused to hold stocks (preferring to buy only on a just in time basis).
The excessive credit given by the product producers, combined with the loss of many firms who owed money, meant many accounts were never settled. It led to much consolidation in the material market with producers also going out of business.
I suspect that weary suppliers are deliberately throttling back on production so that they are not left with surplus stock should the market crash. There is evidence of much slowing, despite some recent firms reporting record revenues).
Just shows then you can't believe either side ;) - bit like Politicians, especially that Labour bloke Corbyn. Loving Traingate and how his Aides are now trying to create a smoke screen over Data Protection now re: Branson.
Well caught out :D
I like to look at data, although I do like to read reasoned debate behind theories.
There are many charts that are showing some very overdone markets which HAVE to be corrected. It's all part of the human nature of cycles.
Have a read of this FT article from January (I hope you can, the FT might not let you without paying) https://www.ft.com/content/a039b728-c067-11e5-846f-79b0e3d20eaf
I'll post an extract and risk getting told off.
"There’s a clear message in there for anyone who believes in reversion to the mean: sell your house in London and buy one in the country. But this chart isn’t the only thing sending that message. There is also the basic economic truth about demand creating its own supply. You’ll have heard a lot of talk over the years about how it isn’t possible to substantially raise the supply of housing in London. But a PropertyVision report out this time last year proved that to be nonsense: it noted that “the sheer scale and monumentality of the towers that are rising daily is in a league of its own” and counted 54,000 new flats on the way in central London.
Anyone who keeps an eye on planning applications — or for that matter the Homes & Property section of the Evening Standard — will know that number has been rising steadily: there are 10,000 new flats planned on public land around Wormwood Scrubs, for example. Transport improvements are also making areas once thought of as outer London as commutable as parts of central London — something that Crossrail will do even more to emphasise.
So we have a price signal here (too high) and we have a supply signal (lots coming) too. Next up is a policy signal. The government is not keen on super high house prices in London. It looks bad. So they have been working to discourage foreign buyers with the higher stamp duty rates and the annual tax on enveloped dwellings (Ated) for houses bought inside companies. They also hit the market with the new rates of stamp duty for houses worth £1.5m plus and told us that anyone buying a second home would be paying 3 per cent extra from April.
I recall working as a buyer in a factory in late 90's when we went from the JIC attitude = Just in case to the JIT = just in time. This involved artics queuing outside the gates for their 10min delivery slot.
It reduced stock-holding massively, which in turn reduced the unit cost of each item and presented the opportunity to max out on production floor space.
From today's Guardian
Is Britain on the verge of a Brexit-fuelled house price crash? Only the data will tell
https://www.theguardian.com/commentisfree/2016/aug/25/brexit-crash-...
"The website also tells you how many sales it recorded in the last 12 months, which in London was 71,973, or an average of well over 6,000 a month before 23 June. Zoopla’s London transactions fell to 2,000 a month in the latest three months. This is a huge fall – although it is possible that it partly reflects the fact that not all of the most recent data is in its datasets.
However, I saw a similar drop a very long time ago, in October 1989 when people stopped buying homes because they thought prices were falling. Later, negative equity began to rise. We all know what happened next."
For the record, I believe that Brexit is becoming a scapegoat for much that was happening or about to happen anyway.