Making a crisis out of a slowdown

Mr Hudson of Allen & Harris estate agents seems to have a very short memory, less than three days to be precise. On Friday, he seemed to be worried that supply is exceeding demand and house prices are falling.

Allen & Harris manager Steve Hudson said: “This month we saw 20 people agreeing to reduce their house prices in order to create more activity and get moved. Some people are also looking to sell and then rent while waiting to buy later to pick up a bargain.” He has seen a drop of around £7,000 from houses priced at the Swindon average of £149,000.

Today, his worries have reversed and he fears that demand might exceed supply.

Manager Steve Hudson, from Allen & Harris, fears that cutbacks [in new house building] could mean demand is not met. “The last thing we need is a housing shortage.” he said.

If people want house prices to rise, then what they need is a housing shortage. If they want prices to drop, they need over-supply. ’Tis the simple economics of supply and demand. If one considers the large numbers of people who wish to buy but can’t in the free market, and so are dependent on social and ‘affordable’ housing, that suggests there is a real need for house prices to fall, for everyone’s benefit. (Every ‘affordable’ house built — 30% of all major new-build in Swindon — has to be paid for by the profits made on all the other houses built.) So, in that respect, Mr Hudson is correct and a housing shortage is not in the nation’s best interests. However, I suspect his motives are far less altruistic….