Let’s try to ignore Mark Carney’s latest comments and wind the clock back to mid-August when Boris Johnson had his letter on the Housing Crisis printed in the Times. His main gripe appears to be with developers. He names Persimmon Homes as a principal culprit in “not building homes to an acceptable standard and generally refusing to repair basic faults.” He points to affordability and poor supply as the basic reasons to the Housing Crisis and cites a number of solutions which includes freeing up brownfield sites, reform of stamp duty, scrapping affordable housing quotas, and freeing up land being hogged by developers who are “treating their buyers like serfs”. His main bugbear are the developers.
Boris’s first criticism of developers, in not building homes satisfactorily, is fundamentally flawed. Developers are sellers like any other seller and so buyers have the same “rights” against a developer as they have against anyone else selling a home. Buyers are normally advised to carry out a full structural survey on a home they hope to buy while their solicitor checks that the paperwork is in order. If the property is still in the process of being built, then it is quite common for buyers to “retain” a sum of money prior to completion. If the developer fails to complete the work satisfactorily then this “retention”, which can be tens of thousands of pounds, can be withheld by the buyer. The surveyor and/or solicitor are also likely to include within the contract a “defects liability period” where the developer is contractually obliged to put right any faults within a given period of time, in most cases well after a buyer has moved in. All in all, therefore, there already are measures in place to protect the buyer. His second criticism of developers is that they are “blatantly landbanking to keep prices high”. Developers are entitled to work within the law as they see fit. If the Government is not happy with how developers appear to twist the rules in their favour, as they claim, then it is up to the legislators like Boris to change the law.