Tuesday, Aug 21, 2007
22,000 acre strategic landbank !!!!!!
BBC News: Persimmon upbeat on house market
The most interesting bit of this story is the 22,000 acre landbank. How many flats/houses are being kept from being built by that?
Sounds like several years worth of the govt's "celebrated" 250K homes per annum.
The supply side will never be sorted until these landbanks are addressed.(Not that there is a supply shortage - check out the lack of rental increases)
I wonder where the buyers will get their mortgages from to keep Persimmon flush over the next few quarters?
Posted by voiceofreason @ 10:28 AM (799 views) Add Comment
20 Comments
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1. tyrellcorporation said...
These landbanks are outrageous! It's just like De Beers controlling the price of diamonds by restricting supply. Agreed, politicians ought to really force them to release this ASAP.
2. Davros said...
Where has the phrase 'robust' appeared from?? You can't describe anything about the housing market, be it mortgage lending, house building, without the word 'robust' being thrown in there.
3. Mark Harris said...
Please don't talk such rubbish tyrell - they have a landbank but little or none of it has planning consent. With current Government policy little of this land bank is likely to achieve planning consent and therefore be able to be built upon for many many years.
you need to understand the system before you post such comments
4. Tickock said...
As I have said many times before, land supply is not the problem, land ownership (and therefore distribution) is.
How long can this debate completely ignore this fact?
5. Renting Russ said...
They should be limited to holding, say, the amount of land equivalent to what they built on over the last 3 years. That would seem to provide the right kind of motivation along with a fair restriction.
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8. Geneer said...
Persimmon is a housing developer. They will be upbeat about house prices each and every month, all the way to the bottom of the coming crash.
9. cyril said...
According to by back-of-fag-packet calculation, you could build about a million houses on 22,000 acres. Seems rather a lot doesn't it?
10. voiceofreason said...
Mark, seems strange to boast about 22,000 acres of land bank if they haven't got a snowball's in hell of building on it !
They wouldn't be bragging about it purely because of it's benefit to nature surely ?
Otherwise Persimmon would be more akin to the RSPB.
So, why do they have 22,000 acres lined up if it ain't for building on, please explain :-)
1 mil houses. Thats a third of the 3 mil target from one corporation then !
11. sirgoogle said...
Developers have a habit in the south of England of buying up farmland designated as Greenbelt whenever it comes up for sale. They then sit on it and rent it back to the farmers. They then wait until a sympathetic councellor can be "bribed" (perhaps with the promise of a cheap house of one of his/her children) into removing its Greenbelt status.
It is a slow process but it is by these means that greenbelt land gets developed and brownfield land gets left (se you have to clean up industrial land before developing)
12. Mark said...
interesting points..
WE have seen evidence of council corruption in ellesmere port and neston with building on greenbelt... it seems the bigger the company the more chance they have for building on it, it was also interesting to see some of our local
councillors houses.. nice size, nicely done up, new cars, seem to have money. hmmm where does the money come from?
13. Soldinjune! said...
I am currently renting a house from a large developer who purchased the property to gain access to a large block of green-belt land at the rear. The land is not designated as development land in any of the town plans and the developer has intimated that he may have to sit on the land for upto 10 years.. How much of this 22000 acre landbank is in a similar situation?
14. Su said...
It would be interesting to know how much of this potential building land is situated on floodplains. It would also be interesting to know whether the govt is likely to prevent more housing being built on such risky sites.
15. rich said...
@Ticktock
If you have no land ownership then I agree you do get rid of the problem of high land prices. You also create other problems, such as how to decide who gets to live where.
16. Orwell said...
Mark,
Where did you get the idea they didn't have planning permissions on them?
In a land bank you have land ready to build upon. You only need to start the foundations within the currency of the permission to comply. Well that's what we were always told. Chris?
17. planning4acrash said...
Mark Harris, government policy is to give planning permission so long as the proposal is in accordance with the development plan and other material considerations. 80% of applications get approved within 13 weeks and about 20% of appealed refusals get overturned. There is no planning crisis, its a cover up. A land bank is land with planning permission because land without permission has the value of agricultural land, that's the whole point, land without planning permission will barely figure on Persimmons balance sheet because an acre field with permission can cost a million, whilst one without can cost 20k. You are totally uninformed therefore and I note that you provide no evidence for your assertion. The reason this land bank has been noted by the press is because the Royal Town Planning Institute exposed the land bank issue earlier on this year.
You can see the RTPI's research on http://www.rtpi.org.uk/cgi-bin/item.cgi?id=912
This research has not been contested by any of the housebuilders, they all state that they need the land banks, none have denied them.
I heard the CEO of Persimmons on R4 this morning who did not deny the land bank and joked about it saying that they could not possibly run their business without a bank that big. They get planning permission to provide collaterol for loans and also to block other developers in markets they have an interest in. Its common practice and there is enough planning permission to meet demand, but builders are not socialist enterprises and free markets, without intervention, cannot be expected to meet the needs of the lower paid tranches of society. You also can't expect house builders to flood the market with houses, stabbing themselves by putting a downward pressure on prices. Building levels have gone down because there is less public money going into building council and housing association buildings, period.
18. planning4acrash said...
Mark Harris, government policy is to give planning permission so long as the proposal is in accordance with the development plan and other material considerations. 80% of applications get approved within 13 weeks and about 20% of appealed refusals get overturned. There is no planning crisis, its a cover up. A land bank is land with planning permission because land without permission has the value of agricultural land, that's the whole point, land without planning permission will barely figure on Persimmons balance sheet because an acre field with permission can cost a million, whilst one without can cost 20k. You are totally uninformed therefore and I note that you provide no evidence for your assertion. The reason this land bank has been noted by the press is because the Royal Town Planning Institute exposed the land bank issue earlier on this year.
You can see the RTPI's research on http://www.rtpi.org.uk/cgi-bin/item.cgi?id=912
This research has not been contested by any of the housebuilders, they all state that they need the land banks, none have denied them.
I heard the CEO of Persimmons on R4 this morning who did not deny the land bank and joked about it saying that they could not possibly run their business without a bank that big. They get planning permission to provide collaterol for loans and also to block other developers in markets they have an interest in. Its common practice and there is enough planning permission to meet demand, but builders are not socialist enterprises and free markets, without intervention, cannot be expected to meet the needs of the lower paid tranches of society. You also can't expect house builders to flood the market with houses, stabbing themselves by putting a downward pressure on prices. Building levels have gone down because there is less public money going into building council and housing association buildings, period.
19. Tickock said...
Rich,
My point isn't that land ownership should be abolished altogether ( this perhaps isn't the right place for that debate, but, 'availability' in a different world might be decided on the basis of need rather than wealth? :)) It is that the land is 'owned' by an incredibly small section of society ,who have no current need for it other than as a 'future investment'.
The land is urgently needed by families now, but unavailable to them because the 'owners' ( wealthy family Trusts, foreign corporations etc.) have no incentive to make it available to them.
I would argue that a 'one Nation' Government of a 'home owning democracy', ought, perhaps, make efforts to ensure that it is in landowners 'best interest' to reverse this situation.
They have, after all, both the tools, and the mandate to do this.
Perhaps they do not, however, have the power to do this. Which raises other concerns for our Sovereign democracy does it not?
20. Frogger said...
Persimmon have a 50 hectare 'landbank' neighbouring my back garden. After about two years of planning enquiries, they've just been given outline planning permission to build 500 homes, but they can wait up to three years before starting the build. All they seem to do have done over the last two years is rip out trees and hedges (the very first thing they did) and occasionally shovel mounds of earth from one place to another.
The local planning authority have done an excellent job laying down the law, such as ensuring they build 170 'affordable homes' before they're allowed to sell the 200th 'open market' home. Plus they are hot on green issues - they even demand that facilities be provided for 'roosting and hibernating bats'. I suppose this sort of strict planning will become rarer in future.
Anyway, I hope Persimmon don't just wait out the 3 years they've been given to start building, just shovelling dirt from one place to another.