How far will house prices fall [volume 4]

[alfaspecial]

I don't think that lack of land is the issue per se.
The issue is lack of land, with planing permission, that is being 'landbanked' by developers.

Solution 1). Start charging developers Council Tax (backdated to the date of purchase) on any land they hold.
ie if a developer has a plot with approval for (say) 20 4 bed houses then they pay CT for all 20 houses - the result would be that there would be a fair number of houses built pretty quickly.........
http://www.telegraph.co.uk/business/2016/12/18/top...

Solution 2). Forget all this 'getting a social mix' by insisting developers build a certain percentage of 'social housing' in a development..... instead let the local authority charge a 'development tax' on all new builds, 20% say. This money be earmarked for 'affordable' housing.
http://www.telegraph.co.uk/business/2017/02/22/pro...

[z4RRSchris]

the more social and 'tax' you chuck on these developments they longer they will sit undeveloped.

just because a site has planning permission doesn't mean it works as a development. the amount of sites i look at that have a negative land value is unreal.

[fizz47]

z4RRSchris said:

the more social and 'tax' you chuck on these developments they longer they will sit undeveloped.

just because a site has planning permission doesn't mean it works as a development. the amount of sites i look at that have a negative land value is unreal.

Sorry for being thick- but if a site has planning permission to build a house then why would they have a negative land value?

[p1stonhead]

fizz47 said:

z4RRSchris said:

the more social and 'tax' you chuck on these developments they longer they will sit undeveloped.

just because a site has planning permission doesn't mean it works as a development. the amount of sites i look at that have a negative land value is unreal.

Sorry for being thick- but if a site has planning permission to build a house then why would they have a negative land value?

Not a house. A development of houses or flats with mandatory social elements and huge taxes (CIL) and the like to build them. ridiculous amounts of sites are unviable for a developer.

[Angrybiker]

fizz47 said:

z4RRSchris said:

the more social and 'tax' you chuck on these developments they longer they will sit undeveloped.

just because a site has planning permission doesn't mean it works as a development. the amount of sites i look at that have a negative land value is unreal.

Sorry for being thick- but if a site has planning permission to build a house then why would they have a negative land value?

yeah i'll happily take a few plots if someone throws some money at me to take them!

[London424]

alfaspecial said:

I don't think that lack of land is the issue per se.
The issue is lack of land, with planing permission, that is being 'landbanked' by developers.

Solution 1). Start charging developers Council Tax (backdated to the date of purchase) on any land they hold.
ie if a developer has a plot with approval for (say) 20 4 bed houses then they pay CT for all 20 houses - the result would be that there would be a fair number of houses built pretty quickly.........
http://www.telegraph.co.uk/business/2016/12/18/top...

Solution 2). Forget all this 'getting a social mix' by insisting developers build a certain percentage of 'social housing' in a development..... instead let the local authority charge a 'development tax' on all new builds, 20% say. This money be earmarked for 'affordable' housing.
http://www.telegraph.co.uk/business/2017/02/22/pro...

Don't forget the NIMBYS. Every time a proposal pops up round my way for new house building there are massive campaigns against it. Poster boards put up, petitions created, Facebook campaigns etc.

[TheLordJohn]

Blue62 said:

Surely the only thing they can do is to embark on a mahoosive building programme, using a loan scheme to local councils to encourage them to build.............council houses!

It's time for radical change rather than the tinkering referred to to keep the plates spinning. Good quality rental homes at sensible rents and in enough numbers will help to balance the market, but politics and dogma will get in the way no doubt.

We love building houses; we are much slower at building the rest of the infrastructure required.
It's such a shame 'we' have put GDP and material wealth above quality of life for the existing population.

[z4RRSchris]

fizz47 said:

z4RRSchris said:

the more social and 'tax' you chuck on these developments they longer they will sit undeveloped.

just because a site has planning permission doesn't mean it works as a development. the amount of sites i look at that have a negative land value is unreal.

Sorry for being thick- but if a site has planning permission to build a house then why would they have a negative land value?

because it costs more to build/finance than its worth at the end to sell........?

loads of dreamers out there with unviable sites they think are worth a mint

[AuBull]

LVT sites which have planning permission. Essentially force them to build or sell off the land to smaller developers or private house builders who won't need to make a vast profit/any profit at all.

[p1stonhead]

AuBull said:

LVT sites which have planning permission. Essentially force them to build or sell off the land to smaller developers or private house builders who won't need to make a vast profit/any profit at all.

What now?

[AuBull]

p1stonhead said:

AuBull said:

LVT sites which have planning permission. Essentially force them to build or sell off the land to smaller developers or private house builders who won't need to make a vast profit/any profit at all.

What now?

Parcel the land off and sell to you or me, instead of developers.

[kiethton]

alfaspecial said:

I don't think that lack of land is the issue per se.
The issue is lack of land, with planing permission, that is being 'landbanked' by developers.

Solution 1). Start charging developers Council Tax (backdated to the date of purchase) on any land they hold.
ie if a developer has a plot with approval for (say) 20 4 bed houses then they pay CT for all 20 houses - the result would be that there would be a fair number of houses built pretty quickly.........
http://www.telegraph.co.uk/business/2016/12/18/top...

Solution 2). Forget all this 'getting a social mix' by insisting developers build a certain percentage of 'social housing' in a development..... instead let the local authority charge a 'development tax' on all new builds, 20% say. This money be earmarked for 'affordable' housing.
http://www.telegraph.co.uk/business/2017/02/22/pro...

That just won't work - I'll give you an example....

A few sites I'm looking at have outline planning for +5,000 units and are being bought forward in phases. However, the market only has capacity for ~200 units a year (double this a few years back), how would it be possible to bring them all forward in one go? The market couldn't absorb them.

[kingston12]

AuBull said:

Parcel the land off and sell to you or me, instead of developers.

Would that be workable, and if so, would it actually make a house much cheaper to complete?

If Barratt get permission to build 500 houses on a greenfield site, their access to cheaper finance and economies/efficiencies from building 500 similar units at once must go quite a long way to bridging the gap?

If they buy each plot for £100k, build the house for another £100k and sell it for £300k that is a very handsome profit margin. If an individual bought it, a lot of that profit would be wiped out by higher build/financing costs and that is assuming that the seller wouldn't ask more for an individual plot in the first place.

There is no doubt that developers have done very well out of this property boom, but it will be hard to reduce their influence especially for bigger sites.

[powerstroke]

kiethton said:

That just won't work - I'll give you an example....

A few sites I'm looking at have outline planning for +5,000 units and are being bought forward in phases. However, the market only has capacity for ~200 units a year (double this a few years back), how would it be possible to bring them all forward in one go? The market couldn't absorb them.

That's not what they are trying to achieve !! they want house prices to fall !!!

[Tuna]

kiethton said:

That just won't work - I'll give you an example....

A few sites I'm looking at have outline planning for +5,000 units and are being bought forward in phases. However, the market only has capacity for ~200 units a year (double this a few years back), how would it be possible to bring them all forward in one go? The market couldn't absorb them.

That's kinda the point. You're desperately trying to preserve high prices by restricting supply (and operating a land bank). The suggestion is that prices are too high and housing essentially unaffordable because you're withholding property that is much needed.

[Croutons]

Tuna said:

That's kinda the point. You're desperately trying to preserve high prices by restricting supply (and operating a land bank). The suggestion is that prices are too high and housing essentially unaffordable because you're withholding property that is much needed.

There are st loads of houses for sale, really there are. Why are more needed when people aren't buying the existing ones available for sale? What makes a new Barrat box (that it seems you'd like them to benevolently give away without profiting, a real incentive to crack on) better?

[powerstroke]

Croutons said:

Tuna said:

That's kinda the point. You're desperately trying to preserve high prices by restricting supply (and operating a land bank). The suggestion is that prices are too high and housing essentially unaffordable because you're withholding property that is much needed.

There are st loads of houses for sale, really there are. Why are more needed when people aren't buying the existing ones available for sale? What makes a new Barrat box (that it seems you'd like them to benevolently give away without profiting, a real incentive to crack on) better?

Yes but house prices have risen beyond many working peoples income , so a supply /demand correction is ???
I think something has to give maybe land values and Im sure existing run down property is going to fall in value when there are so many new turn key new builds , round here in mid cheshire we have been flooded with new builds so I would be very worried if I was trying to sell anything old and bog standard ,add BTL issues and reducing immigration and bingo we have a buyers market .

[hyphen]

Croutons said:

Tuna said:

That's kinda the point. You're desperately trying to preserve high prices by restricting supply (and operating a land bank). The suggestion is that prices are too high and housing essentially unaffordable because you're withholding property that is much needed.

There are st loads of houses for sale, really there are. Why are more needed when people aren't buying the existing ones available for sale? What makes a new Barrat box (that it seems you'd like them to benevolently give away without profiting, a real incentive to crack on) better?

Not buying as too expensive...

Profits at the big house builders have been great for last few years, if they are land banking, then best to address this when they are riding high.

[TheLordJohn]

powerstroke said:

Reducing immigration

Good luck with that. Neither party will (or more importantly, want to) do that.

[Derek Chevalier]

powerstroke said:

I think something has to give maybe land values

Land prices are driven by property prices, not the other way round. The way to solve the issue is to unwind the credit bubble, raising base rates is a start.