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Lack of cash holds back builders

Last week I was at the Property Week RESI 2011 conference, which attracted a record attendance of 1,100 people.

The keynote speaker was communities secretary Eric Pickles and his focus was the new national planning policy framework, particularly its presumption in favour of sustainable development.

He argued the fact that the previous Government failed in its “laudable ambition” of building 250,000 homes annually was evidence that the old planning system did not work but he failed to provide a target for how many homes his Government would build.

That was wise as it is hard to see much change from the 100,000 built last year any time soon. Even though changes to the system may help to increase the number of new homes built, Mr Pickles did not address the even bigger problem – lack of finance.

There was a presentation from a website launched that day, lucky.com, which is the first searchable Chinese language portal for overseas property. It lists UK property for sale in Mandarin. This an indication of the increasing importance of Chinese buyers in parts of the UK property market, particularly London.

There were some interesting statistics about homeownership from Centre for Cities chairman Nigel Hugill. A table using figures dating back to 1996/97 showed the number of owner-occupied homes increased until 2000/01, since when there has been hardly any net change. What is more interesting is since peaking at 62 per cent in the late 1990s, the proportion of homeowners buying with a mortgage has fallen steadily to 54 per cent, meaning in 2008/09, 46 per cent of English owner-occupied homes were owned outright. As this trend started during a bull period for property prices, it cannot be put down to more cash buyers since the credit crunch. I suspect an important factor is increasing longevity, resulting in the number of retired people owning a home where the mortgage has been paid off increasing quicker than the number of first-time buyers.

Ray Boulger is senior technical manager at John Charcol

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