I was chatting to a retired ex MD of some Barratt companies who told me that what they have been focussing on is the one bedroom low cost 'house' as this is the high demand market with the higher margin percentage. It sort of ties in with some of what you are saying though possibly without the political edge! It really doesn't matter what the politicians say or do the market will always have the last word. Builders have to build and sell to stay in business, ergo they must find costings and markets that are compatible.
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