Gone very quiet

[loafer123]

Forester1965 said:

I don't agree with him that stamp duty is the problem.

Of course housebuilders build to demand. That stands to reason. The problem holding up demand is affordability. Affordability is a problem because house prices are too high versus the average wage. House prices are too high because supply is restricted so sellers can attain high sale values. Chicken and egg.

Housebuilders and associated agents don't want a fall in resi values or to have to carry the cashflow/margin can for a downwoard adjustment in housing values when supply begins to properly meet demand. Politicians don't want it because the risk of negative equity or falling house prices for existing home owners is an electoral disaster on a stick. Nobody wants it, apart from people trying to get on the housing ladder.

Much easier to blame a tax that might get in the way of high margin housing transactions at a greater scale.

The comment on stamp duty was a more general one than specifically housebuilding;

As Paul Johnson (director at the influential Institute for Fiscal Studies) eloquently put it, stamp duty “is among our worst and most damaging taxes; it gums up the housing market, keeps people who don’t need them in houses that are too big for them, thus reducing the supply available to growing families; and it serves to reduce labour mobility”.

Lower mobility in the market means that younger people stay in rented for longer because the first rung of the ladder owners can't move up as people hold off moving as long as possible to save on the substantial cost of stamp duty.

[Forester1965]

So build more affordable housing.

[loafer123]

Forester1965 said:

So build more affordable housing.

As with everything, there is no single answer. If there was, it would have been done.

I believe we should build more affordable housing. I don't think it should be social housing - I think it should be affordable rent and affordable sale which are basically a 20% discount, rather than a much greater discount for social housing.

By doing that, many many more affordable homes can be built, and much more quickly.

[LuckyThirteen]

That article is disingenuous at best. He clearly tempers things because he doesn't want his or his employers name to upset certain interests.

Encouraging more developers into the space as well as making competition more prevalent would be a start.

More developers, more readily able to compete for land would reduce market share for the large players. The larger would be forced to build more to sustain activity and revenue.

Against smaller developers who will build as much as they can.

He deliberately overlooks that many small developers can't match the power of the developers when securing option agreements, and then being able to take their time. Moreover, even when planning is granted still not be under the same pressure to build quickly.

This needs fixing. Time limit on completion of developments, time limits on option agreements and a public register of them.

Also some form of incentive assisting developers who are smaller with liquidity and the costs of it in the first instance. Not tax breaks, no change to the fundamental mathematics, just easing their ability to get out there and secure more plots.

Then, planning. It does need reform. It needs to be faster.

After that conveyancing needs an overhaul. The current woeful standards actually cost activity, as well as wastes money.

[loafer123]

Some of that is valid, some of that would make the problem worse.

I agree we should encourage more SME builders. One way is to encourage large schemes run by master developers who then sell smaller serviced sites to smaller builders, but we can’t get away from the buying power and economies of scale of the large builders. Homes England financing for developers does help, and that could be boosted.

Time limited completion of developments would stop many developments from even going to planning. Housebuilders would build if they could build and sell profitably, but forcing developers to build unprofitably would end in tears very quickly, so sites would end up being put into planning only when immediately viable. I had a lovely waterside site with consent for 300 units some time ago. It still hasn’t been built because it still isn’t viable.

Saying planning needs reform and needs to be faster is obvious. The question is how? Who is going to be told they can’t throttle planning? Natural England? Local Residents? Lobby Groups? Local Planning Authorities? Etc etc.

I agree conveyancing needs sorting – perhaps we should all go more Scottish?

[skwdenyer]

loafer123 said:

Forester1965 said:

So build more affordable housing.

As with everything, there is no single answer. If there was, it would have been done.

I believe we should build more affordable housing. I don't think it should be social housing - I think it should be affordable rent and affordable sale which are basically a 20% discount, rather than a much greater discount for social housing.

By doing that, many many more affordable homes can be built, and much more quickly.

It isn't true to say there's no single answer. If Government simply went back to building social housing, affordability could improve as supply eased.

The private market is incentivised to keep rents high, not to adequately supply the national need. Doing things in the national interest is why we have Governments. Unfortunately, our Governments these days appear considerably in thrall to private interests, removing one of the pivotal roles of Governments in sorting out the failures and inefficiencies of markets.

Private landlords by and large don't build. Commercial operators haven't built enough to depress prices. Logically it requires that Government step in - just as it did in the past to fix essentially the same problem (this isn't a new problem).

[skwdenyer]

loafer123 said:

Some of that is valid, some of that would make the problem worse.

I agree we should encourage more SME builders. One way is to encourage large schemes run by master developers who then sell smaller serviced sites to smaller builders, but we can’t get away from the buying power and economies of scale of the large builders. Homes England financing for developers does help, and that could be boosted.

Time limited completion of developments would stop many developments from even going to planning. Housebuilders would build if they could build and sell profitably, but forcing developers to build unprofitably would end in tears very quickly, so sites would end up being put into planning only when immediately viable. I had a lovely waterside site with consent for 300 units some time ago. It still hasn’t been built because it still isn’t viable.

Saying planning needs reform and needs to be faster is obvious. The question is how? Who is going to be told they can’t throttle planning? Natural England? Local Residents? Lobby Groups? Local Planning Authorities? Etc etc.

I agree conveyancing needs sorting – perhaps we should all go more Scottish?

This is all posited on the idea that private development will ever fix the problem. I don't believe it will. The market forces at play do not include affordability as a primary driver (beyond the cliff-edge problem of demand simply drying up). Unless the market is much more strongly regulated in a way nobody wants, the state needs to step in.

We should look to the US for some inspiration here. States legislate to curtail price gouging from many players. There's a much broader understanding of the difference between a free (for all) market, and a regulated market.

[loafer123]

Do you think we should build Social Housing, offering a lucky few a ~50% discount to market rent, or Affordable Housing offering many more a ~20% discount to market rent?

[ben5575]

Zj2002 said:

loafer123 said:

If you want to understand the dynamics of the market, have a read of the article at page 30, which accurately dispels many myths;

https://aces.org.uk/wp-content/uploads/2024/04/202...

I understand the market thanks, given that I am a Director at one of the writer’s competitors. My comments are specific to Scotland where the Green/SNP policies are wreaking havoc with investment in the housing sector.

Yep. As one of the few btr developers actually on site at the moment in one of the cities you mention, I'm very familiar with this.

[Portia5]

ben5575 said:

Yep. As one of the few btr developers actually on site at the moment in one of the cities you mention, I'm very familiar with this.

Do you still have a site adjacent to the Royal Infirmary in Glasgow? Wishart St?

[Redarress]

Quote "conveyancing needs an overhaul. The current woeful standards actually cost activity, as well as wastes money"


This.... I don't know of a more time-wasteful process. .

[skwdenyer]

loafer123 said:

Do you think we should build Social Housing, offering a lucky few a ~50% discount to market rent, or Affordable Housing offering many more a ~20% discount to market rent?

We have just about managed to keep a lid on a total breakdown in the rental market by delivering ever-smaller units to the market. Whilst "affordability" may have roughly kept pace with earnings (on average, renters now pay 37% of income, vs 33% in 2009), the units provided for that money have got progressively worse.

There's nowhere left for that to go. Families living in 1-bed flats are now common (and appalling). Studio flats are now widespread. A new-build 1-bed flat must be a minimum of 50 sq m, but there's been no such restriction on office-to-resi permitted development schemes, and the national (non-statutory IIRC) guidance sets the lower bound at just 37 sq m.

You play a rather peculiar game of envy politics with your comment. We need the whole market to be 20% cheaper than it is now. We need to ensure families have access to suitable homes. And, yes, we need to ensure there are decent family homes for people who cannot afford "market rent" (a ridiculous concept in and of itself).

So, yes, a "lucky few" who meet relevant criteria damn well ought to be able to have a decent roof over their heads - preferably with proper security of tenure to promote the development of communities. And we should ensure these aren't just the lucky few.

It is easy to forget that so much of the laws around tenancies which so many are so gleeful to see the back of were put in place precisely because the market could not be trusted to deliver decent homes at decent prices. The likes of Nicholas van Hoogstraten were the poster child for poor landlord performance. The market was an abject failure.

I don't think you necessarily grasp how much of your taxes are being used to prop up "the market" in the form of Housing Benefit and similar. By 2022, that bill was larger than most Government departments - £24bn per year.

Assuming only 1 bed flats of 50 sq m, that £24bn per year could build 270,000 new homes per year! Even if all we wanted to do was to lower rents by 20% across the board, that would release enough money to build more than 50k new homes per year (i.e. ROI in year 1 alone).

The entirety of Government policy in this area is very obviously not designed to solve the problem.

[ben5575]

Portia5 said:

Do you still have a site adjacent to the Royal Infirmary in Glasgow? Wishart St?

Yep for now.

[robscot]

skwdenyer said:

Families living in 1-bed flats are now common (and appalling). Studio flats are now widespread

There is also a related issue with council housing wait lists growing, and families living longer term in B&Bs etc. Terrible for them, and terrible value for the ever increasing council tax burden.

[skwdenyer]

robscot said:

skwdenyer said:

Families living in 1-bed flats are now common (and appalling). Studio flats are now widespread

There is also a related issue with council housing wait lists growing, and families living longer term in B&Bs etc. Terrible for them, and terrible value for the ever increasing council tax burden.

Indeed. As above, building houses would have positive ROI pretty quickly. It is dogma that prevents it, not rational analysis.

[loafer123]

skwdenyer said:

We have just about managed to keep a lid on a total breakdown in the rental market by delivering ever-smaller units to the market. Whilst "affordability" may have roughly kept pace with earnings (on average, renters now pay 37% of income, vs 33% in 2009), the units provided for that money have got progressively worse.

There's nowhere left for that to go. Families living in 1-bed flats are now common (and appalling). Studio flats are now widespread. A new-build 1-bed flat must be a minimum of 50 sq m, but there's been no such restriction on office-to-resi permitted development schemes, and the national (non-statutory IIRC) guidance sets the lower bound at just 37 sq m.

You play a rather peculiar game of envy politics with your comment. We need the whole market to be 20% cheaper than it is now. We need to ensure families have access to suitable homes. And, yes, we need to ensure there are decent family homes for people who cannot afford "market rent" (a ridiculous concept in and of itself).

So, yes, a "lucky few" who meet relevant criteria damn well ought to be able to have a decent roof over their heads - preferably with proper security of tenure to promote the development of communities. And we should ensure these aren't just the lucky few.

It is easy to forget that so much of the laws around tenancies which so many are so gleeful to see the back of were put in place precisely because the market could not be trusted to deliver decent homes at decent prices. The likes of Nicholas van Hoogstraten were the poster child for poor landlord performance. The market was an abject failure.

I don't think you necessarily grasp how much of your taxes are being used to prop up "the market" in the form of Housing Benefit and similar. By 2022, that bill was larger than most Government departments - £24bn per year.

Assuming only 1 bed flats of 50 sq m, that £24bn per year could build 270,000 new homes per year! Even if all we wanted to do was to lower rents by 20% across the board, that would release enough money to build more than 50k new homes per year (i.e. ROI in year 1 alone).

The entirety of Government policy in this area is very obviously not designed to solve the problem.

There was no envy politics in my question.

It was a perfectly straight question which I have discussed with people from the DG of the relevant government department right down to you.

It’s a shame that you choose to twist everything to fit your own weird agenda.

[Portia5]

skwdenyer said:

Indeed. As above, building houses would have positive ROI pretty quickly. It is dogma that prevents it, not rational analysis.

Rather than build new ones, why not just utilise the ones that are already there?

https://www.dailyrecord.co.uk/news/politics/nearly...

https://www.thescottishsun.co.uk/news/12539504/mum...

O yes. I forgot. They aren't much use at managing the resources either. That's why.

Edited by Portia5 on Wednesday 24th April 18:31

[Portia5]

ben5575 said:

Portia5 said:

Do you still have a site adjacent to the Royal Infirmary in Glasgow? Wishart St?

Yep for now.

Keeping or selling?

[skwdenyer]

loafer123 said:

skwdenyer said:

We have just about managed to keep a lid on a total breakdown in the rental market by delivering ever-smaller units to the market. Whilst "affordability" may have roughly kept pace with earnings (on average, renters now pay 37% of income, vs 33% in 2009), the units provided for that money have got progressively worse.

There's nowhere left for that to go. Families living in 1-bed flats are now common (and appalling). Studio flats are now widespread. A new-build 1-bed flat must be a minimum of 50 sq m, but there's been no such restriction on office-to-resi permitted development schemes, and the national (non-statutory IIRC) guidance sets the lower bound at just 37 sq m.

You play a rather peculiar game of envy politics with your comment. We need the whole market to be 20% cheaper than it is now. We need to ensure families have access to suitable homes. And, yes, we need to ensure there are decent family homes for people who cannot afford "market rent" (a ridiculous concept in and of itself).

So, yes, a "lucky few" who meet relevant criteria damn well ought to be able to have a decent roof over their heads - preferably with proper security of tenure to promote the development of communities. And we should ensure these aren't just the lucky few.

It is easy to forget that so much of the laws around tenancies which so many are so gleeful to see the back of were put in place precisely because the market could not be trusted to deliver decent homes at decent prices. The likes of Nicholas van Hoogstraten were the poster child for poor landlord performance. The market was an abject failure.

I don't think you necessarily grasp how much of your taxes are being used to prop up "the market" in the form of Housing Benefit and similar. By 2022, that bill was larger than most Government departments - £24bn per year.

Assuming only 1 bed flats of 50 sq m, that £24bn per year could build 270,000 new homes per year! Even if all we wanted to do was to lower rents by 20% across the board, that would release enough money to build more than 50k new homes per year (i.e. ROI in year 1 alone).

The entirety of Government policy in this area is very obviously not designed to solve the problem.

There was no envy politics in my question.

It was a perfectly straight question which I have discussed with people from the DG of the relevant government department right down to you.

It’s a shame that you choose to twist everything to fit your own weird agenda.

Sorry I obviously mis-read the tone of your question. But it did seem pretty loaded, rather than neutral, to me at least.

[loafer123]

skwdenyer said:

Sorry I obviously mis-read the tone of your question. But it did seem pretty loaded, rather than neutral, to me at least.

It really isn’t a loaded question.

We have limited funding available.

Some people think we should rebuild the council housing stock at 50%ish discount to market rates.

Others think we should use that limited funding along with commercial debt to build much more self funding affordable housing along the lines of what the Scots call “mid market housing”.

I advocate the latter because I believe it will deliver quicker and greater volume and drags down rents to a modest degree, but it seems you want to rebuild council housing stock and move subsidies from housing benefits to council housing subsidies?