Do We Need Another 1930's House Building Boom?

1930's semi detached houses1930's semi detached housesAn article published by the Guardian proposes that a 1930’s style housing boom may be the key to boosting the economy.

The article states that 1930’s Britain was the first country to come off the gold standard. As such it was able to devalue the currency, assisting manufacturer’s exports and allowing the interest rate to be cut to 2% for a period of almost 20 years. The article cites that this laid the grounds for the private sector driven residential construction boom which helped the country out of the economic depression.

The article notes that whilst today’s interest rate is at an all time low, our economic recovery has been protracted.

Clearly, our modern economic landscape is very different from the 1930’s. The article recognises we are a more consumer and service driven economy and far removed from the primarily industrial economy of the post industrial revolutions.

What the article doesn’t make light of is that the size and scope of the 1930’s industry massively supported the construction sector. Innovations and materials were abundant and a transient skilled and semi-skilled labour market was available.

The demise in UK based manufacturing; the deskilling of the workforce, through the erosion of apprenticeships and lean production methods makes it difficult to apply the same 1930’s template to today’s economy.

The article states:

Open-quoteGovernment policy today has the avowed intent of pushing up asset prices, which is good news for the haves but not so for the have nots.Close-Quote

The article goes onto cite a report by the Centre for Cities. Which argues that funding stagnant developments in towns and cities where there is high housing demand, such as Reading, would provide immediate economic growth. In areas where there is less housing demand refurbishment of existing run down developments is a better route to economic stimulus.

Government policy needs to be decisive to support a massive building program. Compared to 1930’s Britain there is less land, tighter planning regulation and a great deal of uncertainty as to what interest rates will do in the forthcoming months. Government incentives that meet these issues head-on are thin on the ground. For example there are no large scale tax incentives to encourage large scale development and a limited government targets for building.

Ultimately the article recognises the central issue that prevents the government supporting a major house building program is the affect it may have on existing property prices. The market is currently reasonably buoyant due to high demand. A major house building programme will likely see a fall in values. A big help to the first time buyer, but an unwelcome development for those who took out a mortgage at the height of the 2008 market.

Japanese Knotweed

Japanese knotweed at the rear of a propertyJapanese knotweed is an amazing plant. The young stems are edible and taste like bamboo shoots. It can grow over 20 feet in height. Its root systems can penetrate as deep as 3 metres below ground surface level. In some cases it has been reported to grow as deep as 5 metres. It usually grows in thick clumps (or stands). It can grow in a variety of soil PH’s. It will grow from a small cutting and will rapidly reroot itself. Where roots are disrupted new shoots will begin from breaks in the root, travelling vertically and horizontally through the ground. Its subterranean root system can survive double figure sub-zero temperatures. The mid-19th Century saw its introduction to the United Kingdom as it became popular with landscapers as it could grow quickly, form dense screens and hold together land banks with its root system. It was widely used in Wales to hold together subsiding railway embankments. Japanese knotweed has no predators in the UK and as such is not easily controlled. The saving grace is that the plant in this country is female only and is not espablished by seeds. However, the roots and stems can establish in new soil easily if not carefully disposed of.

The plant is a hardy one and it is illegal to spread the plant under the Wildlife and Countryside Act 1981. Soil deemed to be contaminated with Japanese knotweed is sighted as controlled waste under the Environmental Protection Act 1990. In recent years lenders have begun declining loans on properties due to the presence of Japanese knotweed on sites. Most buildings insurance policies do not cover damage and problems caused by Japanese knotweed.

Close up of Japanese knotweedJapanese knotweed can damage ruin gardens, drains, paths paving, walls and out buildings. In rare and exceptional cases it has been reported to affect foundations and floors.
It can be treated in a number of ways. Herbicides can be applied, but this is usually necessary over a number of years. This is most economic, but not always effective. Excavation of contaminated soil is also employed, but soil must be disposed of as hazardous waste and the depth of the root system can mean excavation and disposal amounts to serious costs. Experiments with introduced grazing insects are being trialled, but there are obvious unknowns with introducing non-native insects into the environment. Japanese knotweed being the case in point.

The presence of Japanese knotweed is likely to affect the value of a property and remediation is expensive. Caught early enough and not disrupted the plant can be eradicated before it spreads.

I took these photo’s at a property in Bath. Unfortunately the knotweed had taken root outside the rear of the property. The building occupant was pleased he was only renting the property. The landlord and neighbours are likely to have a very different view on it.