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Construction National blog: 19/03/2012

blog“The 5% deposit is back!” That’s how one large sign at a housing development trumpeted the latest in a line of Big Ideas to have emanated from Dave’s hip over the past year or so.

The headline referred to the latest scheme to boost new home building by guaranteeing low-interest mortgages – but only for new homes. That is wonderful news for the housebuilding industry, but not so good for the house buyer. Apart from the fact there are already 5% deposit deals already available, which implies that any new, government-backed deals will probably only be via higher risk (and guess who’s going to be taking the risk), it will either fuel a new house-price bubble or grind to a halt as soon as people need to shift existing properties.

Plus, only a very small percentage of home sales are of new build properties. Plus, the deal only applies to England. Plus, not all lenders are taking part. Plus, not all builders are offering properties under the deal. The list is endless.

The BBC website ran a piece explaining the scheme which included a long list of reasons why the scheme is of virtually no use whatsoever to home buyers, and a poll on the Telegraph website was in no doubt: it’s a gimmick that will only benefit builders.

That in itself is not necessarily bad – except that the idea is not for taxpayers to bail out businesses: unless that business is a bank, or an insurance company, or a finance company, or…or…or. The fact remains, however, that it makes no difference what deposit you need – if you can’t afford the mortgage you can’t afford the home.

And Dave’s announcement was successfully sabotaged by the main lenders increasing their rates, despite the base rate remaining at an all-time low of b****r all. As a saver rather than a borrower I see that as personal!

Among other construction news, roadbuilding got the same treatment from the PM on Monday. He managed to upset just about everybody with his ideas for introducing more private-sector finance into the system. The only people in favour were the AA and the RAC: oh, yes, and the roadbuilding industry. In this part of the world there are still a number of Toll Bars and Turnpikes in road names to remind us of what happens when you turn the road system over to a Victorian land grab.

Still, guess who ALWAYS uses the M6 toll when heading south, to avoid the car park that is Birmingham. The cost is probably recouped by savings in fuel alone. So much for principles.

Away from the big issues, this week is Ecobuild, with the Concrete Centre joining in a feature called Cool Concrete. Concrete inspires love and loathing in equal measure, and a special feature in a forthcoming issue of Construction National will showcase all that that most versatile of substances can offer.

Chris Stokes