Can the housing market learn from Bernie Ecclestone?

Now he has some time on his hands, perhaps the property business could benefit from a bit of Bernie Ecclestone-style leadership!

Not long ago we wrote our open letter to housing minister Gavin Barwell which proposed a more holistic approach to UK housing delivery, but we know deep down that there is only so much a government can do with a conflicted industry that constantly fails to see the bigger picture.

The right formula

Like Formula One in the 1970s, the various different factions in the property industry are failing to work together to deliver any kind of sustained progress. If only someone could do a Bernie Ecclestone and knock some heads together. That way we might actually get somewhere near to the government’s housebuilding targets.

Adapt or die

Although he had many confrontations along the way, Ecclestone managed to mobilise an old-boy’s network to become a joined-up, dynamic commercial enterprise. Overall standards of professionalism were raised immediately, and to this day Formula One is a sport that is constantly adapting its offering in accordance with new technology and changing marketplaces.

F1 is far from perfect – there are many examples of bad rule changes and comical dysfunctionality at the top of the sport – but it is the endemic culture of evolution that the game of property should aspire to emulate.

The supply & demand agenda

It’s taken a major slowdown in the sales market for major housebuilders to even contemplate PRS as a possibility. Change in the industry tends to be reactive rather than proactive, and is often simply non-existent. This demonstrates how major housebuilders have been skewing the industry as a whole, banking land and dragging their heels, building just enough housing to hit their own targets but never enough to significantly increase supply and thus make the value of property low enough to be affordable to the lay person.

Then you have local and national governments who can’t see past the next election, putting up resistance to the alternative methods of housing proposed by the smaller operators. All too often sites are sold in pursuit of short-term profits, without the thought of a longer-term housing solution. Inevitably these actions have led to house prices spiralling out of the reach of the local community.     

Stagnation V Innovation

The way Bernie Ecclestone shook up Formula 1 needs to be replicated in the housing industry. Until this or something similar happens, the industry will continue to produce over-priced and inadequate housing stock, and local authorities will continue to encourage it.

Bernie wouldn’t stand for this!

Originally published on prsinvest.com