Can anyone explain the behaviour of prices in well-established, good dividend paying building stocks at exactly the same time as the media are reporting a housing crisis in which more houses must be built and regular predictions that the BoE will soon lower interest rates, making borrowing even cheaper than it is now? Does somebody think an army of Polish construction workers is about to leave the UK? I had come to think that with the government wavering about Hinckley Point and about HS2 that the only seriously popular way to progress to satisfy the groundswell of anger evident by the Brexit vote was to print money and push it into the house building sector. That way, you achieve quantitative easing without exporting the money, create employment and solve the socially dangerous phenomenon of over-crowding.
It isn't in the government’s interest to take effective action to resolve the housing crisis. Increased availability of houses would cause a fall in prices to the displeasure of property-owning tory voters. Possibly also pushing enough people into negative equity to have adverse effects on banks, hence the token gestures like help-to-buy schemes, and measures like right-to-buy that probably make things worse by discouraging investment in soical housing. Having said that, I suspect house builders and related companies are oversold and I am long on some.
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