If Britain’s housebuilders really want to sell more homes, they ought to slash their prices rather than lobby the government for packages like last week’s ill-conceived attempt to boost the property market. That’s what the rest of us have done, but while prices of all other houses have plunged, new homes have still been selling for more than they did a year ago.
When the Halifax announced that the fall in house prices had reached double digits in the year to July, the figure that failed to catch the headlines was that new homes had gone up by 1.1 per cent over the previous year. Are we really to believe that new-build is the oasis in the housing market desert — or are the builders playing tricks?
There is indeed sleight of hand by the housebuilders. Though reluctant to cut their prices, they are actively offering other incentives, from waiving the need for mortgage deposits to paying buyers’ legal and survey fees and settling their stamp duty bills — a liability that they largely transferred to the government last week, thanks to their special pleading. Indeed, so successful was their lobbying — even if they criticised the package as insufficient — that the builders who have been giving five-year interest-free loans for a quarter of the purchase price got the government to chip in to that too. So, rather like car manufacturers that offer cashbacks to people buying their vehicles, housebuilders such as Crest Nicholson and Taylor Wimpey have a galaxy of incentives so long as buyers agree a high price.
That the value of new homes has fallen is without doubt. People who put their names down for town-centre flats as buy-to-let investments or pieds-à-terre are having to take haircuts of up to 40 per cent when they change their minds and switch from being buyers to sellers.
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