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Going back to the original point, I really don't think that example supports the argument that more house price growth would lead to more building in the UK.
It does. If house prices had continued to rise the developer would have cracked on and built those houses in 2008, not 2013.
Big builders have massive land banks they already own and build at a rate they know the market will deliver sales. Persimmon apparently own tens of thousands of sites. If they see everything selling fast and prices rising they rush to build as much as they can to make moar profit. If sales slow they slow down build rate.
Hefty
My strong suspicion though is that Cambridge resi land didn't become unviable in 2009, it just became unviable at 2008's land value. Or the landowner thought they'd make more cash by waiting.
Going back to the original point, I really don't think that example supports the argument that more house price growth would lead to more building in the UK.