WE DID not have space for the following chart in our lead note on housing this week, but I think it is worth sharing. It comes from Neal Hudson, of Savills, and reveals a bizarre relationship. For the last forty years the number of new houses built privately has been almost exactly one-tenth the total number of houses bought and sold in a given year. So, for example, if 1m houses are bought or sold in Britain next year (as seems likely) then you can expect about 100,000 houses to be built by private housebuilders. Here is the chart, taken from the Savills website.
This chart has big implications. Everyone goes on about how Britain needs to build 250,000 or so houses each year to keep up with demand. The chart, of course, implies that unless you get housing transactions up, private builders won't get anywhere near that figure (the public sector build very little...Continue reading
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