Goodbye Generation Rent, Hello Generation Buy

[vonuber]

creampuff said:

Eh? I thought all new developments already had a percentage of affordable housing available only to low/middle income earners?

Not in London. The 'affordable' part is generally for those on £50k + for a flat (like me).

[Murph7355]

I suspect there's no universal solution.

Regionally this will be a much bigger problem in some places than others. So the solution(s) needs to be adaptable.

Finding ways to disperse population hotspots would flatten things out I suspect. Or at least lessen the pain. Then have local policies to cover specific local needs.

[AJS-]

JagLover said:

According to this article 70% of the cost is land. Up from 2% before planning constraints were introduced.

http://www.insidehousing.co.uk/its-land-stupid/652...

That's a fascinating statistic, thanks for posting. Quite how this is so ignored I have no idea.

[JagLover]

AJS- said:

That's a fascinating statistic, thanks for posting. Quite how this is so ignored I have no idea.

Its easier to blame builders for hoarding land (even if they hold 300,000 plots that represent about three years supply) than to look at the hard decisions that need to be made.

Clearly house building is not an industry like any other due to the fact that if built on green space that is less green space for the rest of the population. There is a clear public interest and so it is a question of how that public interest is protected.

Personally I would be in favour of a system of development is permitted unless it is prohibited and then draw up a list of areas that should be protected, mini-national parks if you will, but also the best farmland and places where adequate infrastructure can not be provided. Builders would also need to compensate the local communities but there would need to be a clear link between those affected by the building and compensation provided.

It would need government intervention to move to such a system and would have to be done in stages to protect existing builders but only by a complete rethink would you be able to build enough homes for our needs and houses would merely become somewhere you live once again, rather than your main investment for retirement, consuming most of you income until you get there.

[PDP76]

JagLover said:

Its easier to blame builders for hoarding land (even if they hold 300,000 plots that represent about three years supply) than to look at the hard decisions that need to be made.

Clearly house building is not an industry like any other due to the fact that if built on green space that is less green space for the rest of the population. There is a clear public interest and so it is a question of how that public interest is protected.

Correct. There is green belt land behind me, a developer/land management company has owned a decent sized portion of that land for the last 4 years.
They probably thought they would be building on it by now. In fact it's probably been nothing than a major headache for them. The last council meeting on the land and building on it was still a no decision made. Continuation into another meeting.

The farmer sold it, probably hoping to turn a quick profit on it. The land was snapped up for development, the council relishing the thought of hitting its build quota.
It's not happening, at the moment, its rejection city for them, with credible rejections and not nimby ones.

A) it's green belt land.
B) they are planning 400-500 houses, the local schools, doctors, and road infrastructure can not handle this at all, it's already under serious pressure.
C) none of the houses will be in an affordable range for people starting out in the area.

Point C, bear in mind this is an area in south derbyshire, traditionally, in the past a mining and pottery area with farming. The majority of people starting out around here can't afford a 200k plus so called starter home, the local average wage doesn't compute with that price range. The development isn't going to cater for people living in the area, which in my opinion is wrong. The developers around here are now catering for the influx of commuting brummies who have sold up and moving here. Easy links with A42/M42. The developers have done this for a while now, its kicking them back now. This isn't the only proposed development around here that's struggling to get passed.

I get it that the developers want to turn a profit, but when they start pricing local first time buyers out, they deserve the problems they are facing to even get foundations down.

[V8 Fettler]

anonymous said:

[redacted]

Again, you have your opinion, but your opinion doesn't help first time buyers.

[AJS-]

Jaglover

As I understand it most areas of the US and many European countries pretty much do that through zoning - areas are earmarked for housing, industrial development or whatever and development within certain parameters is permitted. Seems sensible enough to me and much more suited to self-build than our current system.

deadslow said:

Cameron sounds like he's joined the wrong party. What is he aiming to conserve?

I think this depends what you want to conserve. To my mind our current obsession with preserving some chocolate box vision of Britain c. 1900 is a very superficial form of conservatism, and owes more to our obsession with ever rising house prices than anything else. The idea of the average working man being able to provide a comfortable home for his family without being in hock to the banks for his working life seems far more genuinely conservative. It doesn't need to mean McMansions springing up everywhere or paving over the Lake District, it's just about allowing the right sort of development to take place in line with demand.

[Sheepshanks]

C.A.R. said:

Surely there's more mileage in convincing single, old people occupying 2+ bedroom family homes to move into residential schemes?

Retirement homes are a big industry and lots are going up at the moment, but just how big is the problem above, with the older generation 'holding on' to the family home they have occupied for many years which is now mostly empty?

I know there is sentiimental value to sticking around and there's not a lot you can do if these old folks bought their house outright for peanuts historically, but some form of incentive to put them in more suitable accommodation would surely open up a huge number of properties nationwide? I can think of around 50% of the properties occupied as such in the street I currently rent in!

Perhaps I'm talking cobblers (no surprise) but the above seems like a much more sensible approach to sorting out this crisis - whilst I apperciate that we aren't building houses at a fast enough rate at the same time...

My road is full of family 3 & 4 bed houses that are mostly occupied by couples or, in a few cases, widowers, in their 70's. At one point there were no children at all in the road although one has sold to a young couple with a kid after the owner croaked it.

The reason people give for not selling up is that there's nothing else suitable nearby, so moving would mean changing areas and they don't want to move away from friends, the local shops, doctor etc.

It would be a very long term thing but strikes me that suitable accommodation should be built as part of new developments so there would be pathway to an alternative.

[Zed 44]

TEKNOPUG said:

So you either increase the number of houses or reduce the size of the population.

+1

[C.A.R.]

Sheepshanks said:

My road is full of family 3 & 4 bed houses that are mostly occupied by couples or, in a few cases, widowers, in their 70's. At one point there were no children at all in the road although one has sold to a young couple with a kid after the owner croaked it.

The reason people give for not selling up is that there's nothing else suitable nearby, so moving would mean changing areas and they don't want to move away from friends, the local shops, doctor etc.

It would be a very long term thing but strikes me that suitable accommodation should be built as part of new developments so there would be pathway to an alternative.

Exactly, but as another poster pointed out, retirement homes or retirement villages as we now sometimes get, are perceived as terrible places to live, somewhere to wait until you die - effectively. And without enough 'space'. One does wonder what quantity of space a pensioner needs, it certainly doesn't seem sensible to require 2 un-occupied bedrooms...

So there's a fundamental problem with these retirement developments, they don't attract the audience enough to warrant moving out of their family home with huge utility bills.

There's the other opinion of course that they've 'earned' that space for themselves, probably through years of hard work, so who are we (the younger generation) to deny them that? Well, other than pointing out that space is of a premium and the sheer number of holiday cruises they could make with the windfall they'd receive from downsizing, there's little to change the mindset. It's their home which they bought, regardless of whether a young family needs it more than they do.

Can it be quantified as selfishness? Maybe. Certainly stupidity if they're reliant on government winter energy bill payouts just to heat the place.

[boyse7en]

C.A.R. said:

Exactly, but as another poster pointed out, retirement homes or retirement villages as we now sometimes get, are perceived as terrible places to live, somewhere to wait until you die - effectively. And without enough 'space'. One does wonder what quantity of space a pensioner needs, it certainly doesn't seem sensible to require 2 un-occupied bedrooms...

A pensioner (65+) needs space for a car project, or a greenhouse to grow stuff in, shed to store bikes, canoes, whatever, room for gym equipment etc... They have the same space requirements as any young couple really. They have more time on their hands to do stuff if they are not working
They need a spare room for visiting guests – their friends are likely to be a similar age, and bunking down on the sofa or floor becomes less appealing as you get older – and they may no longer sleep in the same room so that is three bedrooms required.

[oyster]

speedyman said:

Far better to limit land banking by large building companies.

This.
Or tax land banking.

Imagine if developers had to pay a levy on every sq foot of land they held, regardless of whether that land had permission to build on or not.

A major financial incentive to either develop quickly and sell on, or just sell on and allow someone else to develop. And mothballed projects would also incur the levy too, so no restricting supply until prices come back to where people want them.

[furtive]

These schemes to build affordable houses only work for the first owners. After that they are selling for market rates.

Take this place:

http://www.rightmove.co.uk/property-for-sale/prope...

It was built by the Peabody trust as a part buy-part own scheme for "key workers" like nurses and teachers. It's now for sale for a ridiculous amount of money. Someone has made a pretty penny there...

[crankedup]

oyster said:

speedyman said:

Far better to limit land banking by large building companies.

This.
Or tax land banking.

Imagine if developers had to pay a levy on every sq foot of land they held, regardless of whether that land had permission to build on or not.

A major financial incentive to either develop quickly and sell on, or just sell on and allow someone else to develop. And mothballed projects would also incur the levy too, so no restricting supply until prices come back to where people want them.

Agreed, land banks are an issue alongside developers requirement for profit, understandable. Tax developers land banks and they will push it onto the end buyer/house buyer.

[kiethton]

crankedup said:

oyster said:

speedyman said:

Far better to limit land banking by large building companies.

This.
Or tax land banking.

Imagine if developers had to pay a levy on every sq foot of land they held, regardless of whether that land had permission to build on or not.

A major financial incentive to either develop quickly and sell on, or just sell on and allow someone else to develop. And mothballed projects would also incur the levy too, so no restricting supply until prices come back to where people want them.

Agreed, land banks are an issue alongside developers requirement for profit, understandable. Tax developers land banks and they will push it onto the end buyer/house buyer.

How would you tax it?

How would you define banked land?

The stats in a link further up/last page shows that 62% of all land held by developers is currently being built upon...so just over 1/3 isn't, not a huge amount!

What about the necessity to hold land whilst planning permission is sought or will there be a grace period/only land with planning permission...

If house-building wherever the land is forced through it'd do one of 2 things - bankrupt/put half the home-owing population in default as all values would collapse as we'd end up like spain was in 08/09....huge numbers of properties built where there is absolutely no demand for them


Oh and the other consequence - given defaults above any mortgage providing bank/organisation would likely need another, further bailout....at huge, huge cost

[benjiwengy]

AJS- said:

JagLover said:

According to this article 70% of the cost is land. Up from 2% before planning constraints were introduced.

http://www.insidehousing.co.uk/its-land-stupid/652...

That's a fascinating statistic, thanks for posting. Quite how this is so ignored I have no idea.

Of course that's a completely misleading statistic. Planning constraints were introduced in the early 1930's. Up until the outbreak of ww2, real wages had steadily fallen since to below levels found before 1910. As the value of Land is whole dependant on disposable incomes, it's hardly surprising land values were at their lowest point between the wars.

After the WW2, although wages rose, so did taxes increase %GDP. Furthermore, we had higher property taxes than now, rental income was heavily taxed, mortgage lending regulated, council houses built and rent controls in place.

During this period there was still a fairly steady rise in land prices. However this then grew at a far higher rate when all those policies were reversed/scrapped by Mrs T in the early 80s.

http://www.savills.co.uk/research_articles/141280/...

http://www.capx.co/there-is-no-uk-housing-crisis-a...

As the above two articles show, planning has zilch to do with housing affordability issues.

News build track transactions. Always have, always will. Not matter how many years of banked land there is.

Housing affordability issues are merely a symptom of our economic system where we choose to tax wealth creation and allow land rent to be capitalised into selling prices (instead of being used as Public Revenue).

All pretty obvious and consistent with Ricardos Law of Rent.

[mikees]

This isn't a rhetorical question as I can't find the stats but what was the % of home ownership per population by decade since the 30s?

Are we just striving for an ideal that can't be met?

Can or should every one be able to own a home? I'm sure it was less when I was a child (70s)

Mike

Edit: found a link but can't post it for reason - from the ons

Look like 30% in 1939' 50% in 1971 rising to 69% in 2001 now 64%. So average about 45%. Is that the "correct" point ? No idea.

Edited by mikees on Thursday 8th October 19:23

[edh]

kiethton said:

How would you tax it?

How would you define banked land?

The stats in a link further up/last page shows that 62% of all land held by developers is currently being built upon...so just over 1/3 isn't, not a huge amount!

What about the necessity to hold land whilst planning permission is sought or will there be a grace period/only land with planning permission...

If house-building wherever the land is forced through it'd do one of 2 things - bankrupt/put half the home-owing population in default as all values would collapse as we'd end up like spain was in 08/09....huge numbers of properties built where there is absolutely no demand for them


Oh and the other consequence - given defaults above any mortgage providing bank/organisation would likely need another, further bailout....at huge, huge cost

Land Value Tax is the answer - a long standing Liberal policy, about to be adopted by Labour as well.

[kiethton]

edh said:

kiethton said:

How would you tax it?

How would you define banked land?

The stats in a link further up/last page shows that 62% of all land held by developers is currently being built upon...so just over 1/3 isn't, not a huge amount!

What about the necessity to hold land whilst planning permission is sought or will there be a grace period/only land with planning permission...

If house-building wherever the land is forced through it'd do one of 2 things - bankrupt/put half the home-owing population in default as all values would collapse as we'd end up like spain was in 08/09....huge numbers of properties built where there is absolutely no demand for them


Oh and the other consequence - given defaults above any mortgage providing bank/organisation would likely need another, further bailout....at huge, huge cost

Land Value Tax is the answer - a long standing Liberal policy, about to be adopted by Labour as well.

Its a tax on post-tax income and like IHT totally non-sensical and unjust, only way it would be palitable would be to halve income tax rates for all as a balance.

Also remember residents are transient to a degree so would just move...totally short-sighted. I doubt it'd actually help anything, either that or all listed companies would buy more investment prop and reclassify under the REIT regime...

[benjiwengy]

mikees said:

This isn't a rhetorical question as I can't find the stats but what was the % of home ownership per population by decade since the 30s?

Are we just striving for an ideal that can't be met?

Can or should every one be able to own a home? I'm sure it was less when I was a child (70s)

Mike

Edit: found a link but can't post it for reason - from the ons

Look like 30% in 1939' 50% in 1971 rising to 69% in 2001 now 64%. So average about 45%. Is that the "correct" point ? No idea.

Edited by mikees on Thursday 8th October 19:23

By the time Mrs T took offices, private renting represented 9% of housing in the UK, fallen from the 90% it was before ww1. No one mourned the slow death of private landlords and the increase in homeownership.

In Singapore less than 7% privately rent. 85% own long lease housing owned by the State. Housing is comparatively affordable compared to similar western metroplex's, and their economy can concentrate on productive activities instead to being hamstrung by the property sector. Economic rents ents make up the bulk of revenues allowing low taxes on output, and a small state apparatus.

Not perfect by any means, but the sort of direction an LVT would take us in.