Thursday, July 9, 2009

Propping up the houses

So, looking at the latest results for Barratt the builders, everything looks pretty rosy. And so it should - given that they're obviously being fed money by you and me, via the council and government, to the tune of a couple of hundred million pounds. Oh yes, ladies and gentlemen - we're not only buying banks so that we can loan ourselves money, now we're buying land and houses directly so we can sell them - to ourselves.

See that last sentence there? "deferred terms"? that's right - it means that they're buying up land on a massive "buy now, pay later" scheme. And where is this land coming from? Correct - greenfield land that presumably must be gifted by councils. After all, they did promise the government they'd build houses, so it all makes perfect sense. Any sane builder knows that brownfield projects aren't worth the fake paper they're printed on these days, just look at how cheap town center 1-bed rabbit hutch apartments go for in these troubled times.

But wait! there's more! not only are we giving Barratt's the land to build on - we're also paying them over the odds for their houses! Yes indeed - while house prices fell around the country to the tune of 20% or so, Barratt sales to councils (social housing projects) increased on like-for-like properties to the tune of 12%. How's that for price inflation?

Well done, Barratt. It must have been a real struggle for you guys this year with all the money we're giving you.

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