It has been a long time coming - but come it always was going to...the housing bomb is bursting and the first major local casualty has been announced; Edward Ware Homes Ltd goes pop. Not being one to say 'told you so' but back in 2003 when the papers were breathlessly enjoying the ongoing rise and rise of housing prices, without considering where it might go;
When the economy takes a down-turn, as surly one day it will, interest rates will rise and jobs will be lost. Then the time-bomb explodes. Those morgaged to the hilt will loose their homes. Those without their own homes in rented property will find their rent rising to meet the morgage costs. The already strained housing sectors, despite having the space to house us all will, because of economic factors out of our control, begin tearing a the fabric of the city. Developments will lay derelict, monuments to lost opportunities. The global investors will move out of our city, happy to wait until the market bounces back to realise a return on their investments. We’ll be picking up the pieces while they move their attentions to profitable opportunities elsewhere.
And so the fallout continues. Edward Ware Homes Ltd have collapsed with £5.1 million in dept. They owe lots of people money - including ordinary trades people who are set to only get around £2.50 for every £1000 owed. It is still trading, but only in the hope it can recoup a bit more cash for the creditors. The double-Irony is that Edward Ware Homes were the developers of the 'Panoramic' that infamously Tony Bliar and family brought two flats from. The irony is that the Neo-Labour machine has lorded over developments that have exacerbated the conditions under which this housing bomb is bursting. Again I wrote in 2003;
"To understand what is going on requires a little understanding into how the market is functioning. What is happening is that private capital is being poured into a large number of high-profit housing ventures. To be high-profit they must be luxury, as while you can make money from building affordable housing, you can make a whole lot more from luxury projects. To build anything significant, you require planning permission from the local authorities. They then act as a regulator of housing to ensure that what is being built matches the plans for the area and so, theoretically at least, benefits Bristol and it’s people. However, that regulatory role seems to have been overlooked in a rush to attract investment into the city."
Housing has always been more than 'assets', 'investments' and 'capital' to us normal people - it is a home, where we live and throwing that concept to the market was always going to hurt.