Is Ceredigion Council helping to create a property bubble?

September 23, 2013 6:25 PM

Houses prices in Ceredigion have seen huge monthly increases, in  fact the area was ranked in the top ten for August's increases nationally. Potential buyers in Ceredigion faced a rise only 0.2% smaller than those in London for the same period. Ceredigion Council hasn't missed out on an opportunity though to bolster its bureaucratic army, and has appointed Sian Davies to the new post of Rural Housing Enabler.

This is what she had to say in a council press release:

My focus is on searching for development opportunities or empty properties to bring back into use so that we can boost the supply of affordable housing. I'm supported by the Welsh Government, Ceredigion County Council, Tai Ceredigion and Tai Cantref who are all committed to ensuring that people have access to affordable housing within their local community.

On the surface, moves to support the development of new housing may seem like a positive move and welcomed by those finding themselves priced out of the market. But what if the problem is not that councils aren't doing enough to alleviate the shortage of homes, what if, in fact, their actions are contributing to the problem. Miss Davies' appointment also raises questions over the actions of Ceredigion Council since the introduction of the Unitary Development Plan back in 2001 and more recently the Local Development Plan.

The main driver behind the increase in house prices is the lack of homes being built. Councils didn't plan ahead and anticipate the amount of new homes that would be required. Many would argue this shouldn't be their responsibility in the first place. But house building has certainly being restricted by a lack of willingness to approve planning applications, as in this example where the building of new homes was refused because the application was contrary to polices designed to protect the countryside.

Either way, when the council launched its loan guarantee scheme last year in conjunction with Lloyds TSB, those applying for the scheme can only purchase properties that already exist, and this in turn discourages the development of new build properties. This loan guarantee scheme could also help fuel a local housing bubble and get local residents into unaffordable debt.

Perhaps if the council would stand out of the way and let the market recover by itself, it wouldn't need to create a new post?

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