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About matchmade

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  1. £100K for what size of house? There's no way that includes the land cost and stamp duty, plus there's all the planning fees and the S106 roof tax which runs at £20K for a 4-bed house in my area. I've just built two reasonable-sized 4-bed houses (175m2 including an integral garage) in Reading for £1250 per m2 plus another £25,000 per house for utilities, driveways and landscaping. That's a build cost of £243,750. The land cost was another £200K per house, and the planning costs, S106 tax and loan interest charges were a further £32,000. Total development cost = £475,750 per house.
  2. There seems to be common agreement here that rent should be abolished on residential, and presumably commercial premises, because it is unearnt and "parasitical". Does this mean renting a property should be free, or that no-one is allowed to rent property, only own it? Presumably we should abolish interest on capital as well, because that is unlearnt as well - it is ursury. Therefore the only way to have the right to use property is to own it 100%, or find someone generous to lend you the mortgage capital at 0% interest, or let you live in the house without paying rent. This would include so-called affordable housing: if councils and housing associations were banned from charging rent, they would have to sell all their property or let deserving citizens live in it for free. Sounds good to me. Another good way to control property prices and raise money for the common treasury would be to tax capital gains on house price increases at 100%. Capital gains on principal private residences used to be taxed heavily until 1965 when the 100% exemption was introduced, arguably with disastrous results as someone's house suddenly became their principal tax-free asset. However no-one should be allowed to make capital gains simply by virtue of owning a house, and it should be the State's right to confiscate all capital gains. House price rises can only be justified if someone has improved the property and can demonstrate what they have paid for the labour and materials. if they do their own DIY and count their own labour at zero value, that's just tough: only invoiced expenditure would be deductible against capital gains. This is a great proposal because it instantly kills off house price inflation: what would be the point of someone seeking a higher price on their property than they paid for it, when the whole gain goes to the Government?
  3. Requiring people to do unpaid work in exchange for their benefits is a terrific idea and is long overdue. It doesn't need to be for 40 hours a week, because obviously people need a chance to spend time looking for work and to receive formal education and training, but it seems perfectly right to me that people in receipt of benefits - including a significant proportion of people on disability benefit - should work if they expect to be given free money by everyone else, individual citizens and businesses. They are not "living off the State", i.e. off some amorphous entity that possesses huge and unlimited power - they are living off you and me, and should expect to give something back in exchange for this largesse, as part of a moral contract within the community. The benefit recipient also gains by being forced into the discipline and habit of going to work, with all that that involves, and by gaining experience and training that can go on a CV, either to help them find a job or, better, for them to create work for themselves by setting up a small business and becoming self-employed. There's the endless complaint that "there are no jobs", as if jobs and employment just appear from thin air like magic or it's the Government's responsibility to provide them, when in fact jobs are created by someone else's hard work, or by someone's own efforts to create work for themselves by offering a self-employed skill that someone else is prepared to pay for. What kind of work might benefit claimants do? Well, any parish or borough councillor or local authority employee can tell you there is a myriad of projects that need doing, from physical work like mending fences, gardening and clearing paths to manning the phones for the local Dial-a-Ride charity for elderly people. Charities are constantly seeking new volunteers for all kind of work from fund-raising and customer services to helping old people with practical tasks or simply a friendly voice. There's a charity in Scotland called the Food Train where people in need of free or cheap food are linked up with local supermarkets and shops seeking to dispose of surplus or near-to-date food; people are even helped with transport to the shops, but in return they are required to do several hours of free work a week to help run the charity and keep its costs down: they do not get something for nothing. Even the most housebound usually have access to a phone, which means they can work by being responsible for the helpline from time to time, to take orders or simply to have a chat. Of course this is no panacea, but it ought to be a general principle that benefits do not come for free and people should have to work for them, and that includes *all* benefits, contributory and non-contributory, not just the relatively small proportion of people who are on Jobseekers Allowance.
  4. Or even better, the landlord could pay a student a small amount to housesit a house that is seeking long-term tenants: students don't pay a penny in council tax so the landlord saves paying the full amount. Since local councils are grabbing every bit of money they can (as usual), why just pick on landlords? They should cancel the single-person deduction and the student, prisoner and probate exemptions as well. Council services still need to be paid for, the exemptions are arbitrary, and even with the dead person, someone will be inheriting the estate, so let them pay their fair share. Why not charge them 500% of the going rate to encourage them to tell their solicitors to get a move on and get the property occupied again? Why not charge 500% to prisoners too, and let the amount roll up and a charge be placed on the property's deeds? I would also reinstate capital gains tax on private property, like the government used to have until 1965: a good, healthy 80% CGT rate would rapidly kill off house price inflation and end those on HPC who are obsessed with home ownership for financial reasons.
  5. I also agree. Rent controls were an utter disaster - I can remember what rental properties were like in the 1970s and 1980s: the quality and amount of private property for rent was far, far worse than the average rental property now. Landlords did not maintain their properties because controlled rents bore no relation to the cost of ownership, which all those who rant on about "affordable" seem incapable of considering. The fact is, renting out property even now offers poor returns for anyone with a mortgage: it is rarely a profitable line of business. The average landlord in the south-east makes barely 5% gross, or about 1% net of costs, which is a pathetic return considering the amount of capital employed and the returns available from cash savings or company dividends.
  6. Where do you get this figure of £24,500 from please? I'm a developer/builder and am currently building two new houses sized 175m2 each. The build cost per unit will be roughly £200,000. The demolition of an existing bungalow cost £7,000. Site establishment, hiring toilets and fencing, installing a temporary electrical and water supply cost £5000. The foundations - excavation, sewer and water drainage, trench fill concrete, beam and block floor, utility trenches - cost £26,500 per unit. The scaffolding costs £5,500 per unit. One new fresh water supply from Thames Water, just to connect at the street, cost £1450. One new electrical supply from SSE cost £3,500, and one new gas is £2,500. And so it goes on -- there was a Phase 1 environmental survey, a bat survey, a health-and-safety assessment, a party wall agreement, an asbestos survey, a soil investigation report, planning and building control drawings to be prepared, a Premier Guarantee structural warranty at £5000 per unit, and about £10,000 per unit to be spent on landscaping and creating two front driveways. Plus £15,000 per property in S106 roof taxes that go to the council. And we're still only at beam-and-block level, with the entire superstructure and the fitting-out to be done, and not a penny yet accounted for as regards the land cost. If you can show me a house built for £24,500, including all of the above, I will show you a flying pig. quote name='RufflesTheGuineaPig' timestamp='1343429673' post='909098995'] The average build cost of new build houses, per unit, is £24,500. All the rest of the price is the land.
  7. I just can't see how BTL can be immoral without denying the entire basis of our hybrid capitalist economy: if you take the attitude that making a profit on renting out something you own is immoral, well the same applies to commercial landlords who rent to businesses, or banks that loan you money and charge interest, and so on, until you end up arguing that morally you shouldn't make a profit on anything, including selling goods and services: you should only charge the cost of production to cover your costs, not seek to exploit the fact that you own an asset when you try to sell or loan/rent it. Well, you can take this position, but where's an economy where this has ever worked? Myself, I own a house which I rent out, and I rent myself in a different part of the country because it's more practical for my wife's commute and mine. I don't want to sell my house because it's quite possible we will want to move back there, plus renting is much more flexible if either of us needs to change jobs: we don't have all the expense of buying and selling. Am I being immoral and exploitative because I am renting my house to my tenants, or am I being exploited by my landlord? BTL makes little financial sense if you have a large loan - you are just paying most of the rent to the mortgage company, plus you bear all the risk of maintenance and interest rates changes and void periods, while all the tenant has to do is pay the rent and behave herself. You *may* get a capital gain long-term, but you then have to pay 28% CGT on this. However for anyone with a large deposit, BTL makes good sense: average rental returns are only 5-7% gross, but this will rise with earnings so is effectively index-linked, whereas you will get barely 3% from cash savings and 3.4% for an index-linked annuity. And BTL also offers the prospect of capital gains, and you can hand the investment onto your children, whereas with an annuity you lose all of your capital. To those who say landlords are unfairly subsidised because they can deduct running costs including mortgage interest from their taxable profits, do you also feel homeowners are unfairly subsidised because they don't have to pay a penny in capital gains tax on their home, or that if they sell off part of their garden land to a developer, they still don't have to pay a penny? If you want to remove the tax-deductible status of mortgage interest for landlords, the playing field should also be levelled to impose CGT on rising house prices for homeowners, as the UK used to do until 1965.
  8. The one million empty homes figure is a joke: if you strip out all the properties that are up for sale, auction or awaiting a tenant, awaiting demolition or redevelopment, tied up in an estate going through probate, or where the owner has gone abroad for six months to work and doesn't fancy having their house trashed by a tenant, and so on, the actual number of long-term empty homes that could be sold or rented out is in the mere tens of thousands acrosss the whole country. I'm a small builder and have rung round all the Empty Homes officers in the boroughs near me in Berkshire and south Oxfordshire, and the number of viable properties where I could conceivably find out who the owner is and approach them to negotiate a sale for purposes of renovation is tiny. I'll watch the programme and see what this chap has to say, and perhaps there are dead-end parts of the country with lots of empty houses because no-one wants to live there or employees site their business there, but what's the use of renovating those?
  9. Er, no, a small landlord being driven out of business by a REIT doesn't increase the supply of property to buy - all it does is transfer ownership of one rental property from the small landlord to the REIT, as the REIT has "stolen" the tenant by offering a better deal. The tenant is still renting, whether it's to the landlord or the REIT. As I said, the number of houses available to buy only increases if REITs build more houses, and even then if the houses remain unaffordable through price or lack of finance, all the REITs have done is improve the supply of property for rent. That "may" is telling. I am highly sceptical that a REIT would be better run or offer a more personal service than a small landlord with every incentive to look after her investment and her tenants, because it's one of the few assets she owns. I agree with Michael Ball that BTL is a very unprofitable business, once you take all the costs and risks into account, which is why private businesses avoid the rental market and small private landlords are the only people who will risk it. Why do they bother? Because it's one of the few areas in our benighted, anti-entrepreneurial society where ordinary people with some spare cash feel they can try and improve their financial prospects, beyond having a job or marking time with cash savings or risking their money on the stock market, which hasn't grown in real terms for over ten years. You don't see large organisations getting involved in renting in the UK, unless they are charities or are massively subsidised like local authorities or housing associations, or now, as with REITs, if they receive huge tax breaks from the Government, because it's simply not profitable enough. Most proper profit-making businesses look to make gross profits of 15-20%; and even more if they can, whereas buy-to-let offers barely 5-7%, has barely any upside potential and is acutely vulnerable to interest rate variations or the predations of a rogue tenant trashing the house. It's striking that if property investment trusts get involved in renting at the moment, they cherry-pick and build bespoke expensive student accommodation units near universities: you don't see them buying Victorian terraces and providing houseshare accommodation at a relatively low rent to students or first-jobbers, as small landlords do. I'm not defending small landlords entirely, as there is a proportion who treat their tenants terribly, just as there are tenants who behave abominably (yet suffer far less negative consequences: landlords can be prosecuted for their actions, but tenants who misbehave can only be tackled under the civil law and are given paltry fines at best). I'm just saying being a landlord is a messy, laborious, hands-on business, and organisations like housing associations that take on large social housing projects only do so because they receive massive subsidies and have no remit to make a profit. The Government is trying to bribe large-scale private investment in the rental market via REITS, but REITS will still struggle to compete with small landlords who provide their labour and embedded capital for free and will accept losses on their possible-to-lose investment because they feel this is still a better risk than investing in some over-charging under-performing unit trust or pension scheme. You can criticise their choice of investment and their attempts to meet the demand for rental accommodation - which is nowadays of far better quality and choice than when I was a student in the 1980s - but to me this says more about the lack of entrepreneurial opportunities, incentives and ambition in this country and the paltry returns available to ordinary people through the stock market.
  10. You sound pleased that small BTL landlords will be "crushed" by REITs. How exactly is this going to help improve the supply of new houses to buy at affordable prices, which is what HPC is meant to about? REITs are going to have to buy properties to rent, and will be supported by financial resources and tax breaks, so won't this just squeeze out homeowner buyers even more, even is small landlords are selling up? If REITs are going to be building more new homes than might otherwise occur, their competition won't necessarily be with small landlords, whose properties may have better central locations as they're using existing housing stock, so all it may do is reduce the supply of houses to buy still further and increase the necessity for people to rent as tehy can't afford to buy.
  11. Most UK house and flat plans include square-metre sizes nowadays. People are capable of using their eyes, aren't they? If people let themselves believe that a four-bed house on the same footprint as a three-bed house is somehow worth more money, that's their lookout. I think the reason builders don't put in storage cupboards in halls or pantries in kitchens is because fashions change: a lot more now have built-in wardrobes in bedrooms, but if you want storage in the hall, just buy something you like at IKEA. For every person who claims to want built-in storage, there are others who say it clutters the house up or they don't like the style and they promptly rip it out. As for houses being too small, it was the Labour government who increased the density requirements on new sites, around the same time that they started making builders give away two "affordable" homes to housing associations for every three ones they build for private sale. Modern estates are cramped because the developers have to cram the sites to fit in the social housing as well as the private ones at a price that is anywhere near affordable for the private buyer. If council housing and local infrastructure were paid for out of general taxation, as used to be the case, because it was believed these facilities were for the good of everyone, then private-sector housing could be larger and on more spacious plots. As a builder I would love to build bigger houses with decent-sized gardens, like they last used to in the 1970s for the mass-market, but I simply can't afford to do so given the costs of land and construction and all the taxes and professional fees, not at a price that buyers can afford. I build as large as I can on the plots available and within the constraints of cost and affordability, and always exceed the Parker Morris standards. But then I'm a small builder and don't have to tangle with the nightmare that is affordable homes.
  12. Thanks for a reasoned answer. In my experience current market prices are not a bad reflection of what it actually costs to build a house nowadays, once you factor in ever-increasing building regulations, S106 taxes and the need to give away two "affordable" homes to a housing association for every three a builder is able to sell privately. The only real variable that would make a substantial difference to the price of a new house is the cost of land: everything else is construction costs, planning and other fees, loan interest and taxes like S106 and social housing, which are fairly predictable, plus or minus ten percent. Even if you avoided the social housing charge and managed to get planning permission to build a single three-bed 110m2 house, in my area this would cost about £110K to build to a reasonable standard, plus S106 £15K, plus professional fees about £20K (planning, architect, land survey, bat survey, environmental survey, arboricultural survey, building control, legal work to buy the land), plus bank fees and interest about £10K, which totals £155K even if prices fell so far, someone gave you the building plot for free. If you have the money to build a house for cash, and can find a site where you're not out-bid by other self-builders, never mind developers, and can persuade builders and professionals to drop their rates for you, well good luck to you. That's a lot of ifs. There will never be any relaxation in the planning rules: that's just for the big boys who are being given permission to build large estates via Core Strategies on a daily basis, provided they cough up £25K on average per house in Community Infrastructure Levy and give away 40% of the houses to housing associations to rent to people on benefit who contribute nothing. With new houses being expected to meet the Government's social housing policies (for which existing homeowners and businesses don't have to pay a penny) , the council's new local infrastructure (ditto), and the Government's carbon targets (ditto), it's not surprising the cost of new private housing and the densities are so high.
  13. I find your utter cynicism really repellent. I'm a small housebuilder and have just spent twelve months building four nice relatively large flats that have cost me a fortune to fight through planning permission, bankers who won't lend me any money, every kind of conceivable weather, unbelievably fussy building regulations (often mutually contradictory between what the NHBC and LABC want) and the usual perils of employees who fancy a day off and suppliers who never deliver on time. I haven't taken a salary for myself all year, and guess what, I just bet you people at HPC will always, always say that what I've built is too expensive, too small, too low quality and generally not to your fastidious tastes. Have you ever tried building a house or block of flats? Have you any idea how much it costs or how difficult it is? You accuse people like me of having the cheek to build houses with the aim of making a profit, no matter how small; you accuse me of being "greedy" for simply wanting to make a living. The fact is the vast majority of people on HPC haven't a clue what it actually costs to buy land, obtain planning and build a house, and they have a deeply sad and cynical attitude towards everyone involved in the housing industry.
  14. Er, no, it's not the same if the rental option offers greater density of occupation. A owner-occupier generally only offers accommodation for one or two adults, unless you take a lodger or have a live-in granny or have interesting menage-a-trois living arrangements. A rented property, however, can be a houseshare, and can easily provide homes for four or five adults, usually young and mobile people who don't want or can't afford to buy.
  15. I agree a system for measuring and advertising the square meterage of housing would help, both for rentals and sales, but do you really think British people are so unintelligent, that they don't notice somewhere is small, even though it's got more bedrooms? The reason that new houses have got so small is not because builders are so clever and buyers too stupid to notice, but because the cost of land and getting planning has become incredibly expensive, and because government policies requires builders to give away 30-50% of their sites as "affordable" homes. Builders only make a profit on two-thirds or less of their sites, so the only way they can stay afloat is to cram their sites. This was something explicitly recognised by New Labour when it changed the density rules to allow much smaller plots at the same time as they introduced their utterly unfair affodable homes and S106 policies. I say unfair, becasue council housing (though run by housing associations now) and local infrastructure used to be paid for out of general taxation, because it was believed that everyone benefited from these facilities. Now, the housebuilding industry is staggering along under the weight of having to provide free housing for benefit layabouts and "key workers", plus new schools, roads, playgrounds and so on, usually miles away from the new housing, whilst existing homeowners and businesses don't have to pay a penny for all this free infrastructure.
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