David Dundas is a Lichfield City Councillor, Managing Director of Lion Industries and an active member of CPF. He has a science degree from St Andrews and an early career as a field service engineer in the oil industry that finally took him to Brussels, where he worked for Texaco Europe. He stayed on in Belgium for 22 years, working for several American companies including Dow Corning in their Energy department, and for a time, was a consultant to the European Commission on toxic waste disposal.
The house building industry is undoubtedly in crisis; workers are being laid off, which is dragging the economy into recession. The government has run out of good ideas and is fiddling about with bad ones like the eco-towns and now the suspension of stamp duty. So how can we restore confidence in the housing market and bring it back on track? Just pouring money into the banks is an expensive way and on its own is unlikely to produce a significant improvement, because it is not sufficient on its own to address the problem of confidence.
Most housing developers have either stopped, or are stopping building new homes. As building workers are often sub-contractors, it has been easy for developers to terminate their work. Whilst many tradesmen have found other work in the short term, in activities such as refurbishment and house extensions, there is a limit to the amount of this kind of work available, so construction workers are going to find themselves progressively out of work, placing a further strain on the economy, as unemployment rises.
Whilst the media gets excited about house owners with negative equity, this misses the point because they are only small proportion of all mortgagees, so this is not the major threat to the nation. Banks will not repossess, if borrowers continue to repay their mortgage; the far greater threat comes from those who lose their jobs and therefore cannot pay the mortgage. It will be the construction workers who will first dominate this group.