Opinion

Hugo Dixon

How to fix the UK’s housing mess

Hugo Dixon
May 19, 2014 09:56 UTC

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.

The Achilles’ heel in Britain’s strong economic recovery is the mess in the housing market.

House prices are rising yet again – by 10.9 percent in the year to April, according to Nationwide. This raises the risk of yet another cycle of boom and bust, so much so that the Bank of England recently described rising house prices as the “brightest light” on its risk dashboard.

What’s more, there aren’t nearly enough new homes being built to cope with the soaring number of new households created by rising divorce rates, people living alone in old age and immigration.

True, house building is on the rise. In the year to the end of March, work began on 134,000 new houses – a 31 percent increase on the previous year, according to official figures. But the number of new houses needed each year to meet demand is about twice that.

Do national champions merit protection?

Hugo Dixon
May 5, 2014 06:28 UTC

By Hugo Dixon

Hugo Dixon is Editor-at-Large, Reuters News. The opinions expressed are his own.

The French always protect their national champions, while the British have a laissez-faire approach to foreign takeovers of their top companies, right? That is certainly the caricature. Witness how France deterred PepsiCo from bidding for Danone in 2005 on the grounds that yoghurt was a strategic industry, while the UK allowed U.S.-based Kraft to move ahead with its hostile bid for Cadbury, the confectioner, in 2010.

Recent events, though, show that the picture is somewhat more complex. When news first leaked that General Electric, the U.S. industrial giant, was negotiating to buy Alstom’s power generation business, the French government’s knee-jerk reaction was hostile. But by last week, Alstom had reached a deal to sell its power unit to GE for 11.4 billion euros and Paris had softened its opposition.