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schadenfreude too is a form of market fundamentalism

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Britain’s social housing industry suggests £1bn spree on empty stock – Times Online

The group representing Britain’s social housing industry is in talks with the Government to free £1 billion of public money to help to bail out the new homes market.

The funds would be used to buy tens of thousands of mostly inner-city flats and family homes at a heavy discount from beleaguered housebuilders.

These properties were originally expected to be sold to private buyers but are now part-built or empty as the sector struggles to deal with the sharpest slump in sales for more than a generation.

The proposal from the National Housing Federation (NHF), the umbrella body for the UK’s housing associations, is under consideration by ministers at the Treasury and the Department for Communities and Local Government. If the package is agreed, it could kickstart the moribund housing market by buying at least 10,000 units. That would help the big housebuilders, whose share prices have collapsed over recent weeks amid fears that they will be unable to service their debts as cashflow dries up.

It would be really nice if someone a bit more economically numerate than me could maybe write some thing explaining why any coming housing collapse isn’t simply going to be the real opportunity to get on the property ladder that you’ve been waiting for – that, in fact, unless you have stacks of cash sitting around the house (and if you did, you’d likely have a house already, and thus be wrapped up on the downside of this thing) it’s not going to be any easier for you to obtain a lovely little 2 bedroom in Brooklyn or whatever than it was before. The housing crunch is structural, it has largely to do with mortgage rates, not underlying consumer demand. Have you noticed any fewer people milling about? Nope – everyone’s still here and everyone still wants a roof over their heads. The only winners will be those, say, emerging with their college degrees and a stack of dad’s cash to spend without financing. Oh, and property speculators. They’ll win because they always do.

Donc, maybe a little more thinking like the above and a little less hand-rubbing anticipation of the bargains to come. They won’t.

Written by adswithoutproducts

June 20, 2008 at 9:26 am

Posted in economics, socialism

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