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[Authoritarian]

Not if they keep it as agricultural land. They would make money only if they sell to a developer, or build themselves, right?

So, what do you think they would do?

I think they would either build themselves or sell to a developer who would then build as soon as possible.

Here in the south-east you would see the biggest construction boom in UK history. The post-war houses for heroes would pale by comparison.

The increasing supply of houses would keep pushing house prices down.

By the way, if you prefer: This increased supply of housing would also push RENTS down, reducing yields, and thus pulling house prices down.

Look Chef, your efforts to find cracks in orthodox economics are commendable. There may be indeed some/many flaws and areas of uncertainties. But the law of supply and demand is not one of them. Our HP bubble was caused by demand being boosted by too much and too cheap credit, and by tax breaks, and by LHA, and by supply restricted by planning blockage.

You're getting cause and effect mixed up, if all land was granted pp it would increase the supply of credit as there would be more high value assets for the banking system to lend against.

Your theories on what might or might not happen are all irrelevent imo, all we know as that the land that is given pp goes up in price and we can prove this now if you like. Imagine if you were in receipt of special knowledge and that you alone knew that the Town and Country planning act was to be scrapped next week, would you

1) attempt to buy as much land as you could before the change, or

2) sit tight, as your theory suggests that widespread pp will have the effect of reducing landprices to £0 over the longer term.

Are you really saying that you'd wait it out? I suggest that the smart money would move in the opposite direction.

oh and the laws of supply and demand only work in free markets, as the housing market isn't a free market these rules don't apply

Edited March 6, 2011 by Chef

[Tired of Waiting]

You're getting cause and effect mixed up, if all land was granted pp it would increase the supply of credit as there would be more high value assets for the banking system to lend against.

Your theories on what might or might not happen are all irrelevent imo, all we know as that the land that is given pp goes up in price and we can prove this now if you like. Imagine if you were in receipt of special knowledge and that you alone knew that the Town and Country planning act was to be scrapped next week, would you

1) attempt to buy as much land as you could before the change, or

2) sit tight, as your theory suggests that widespread pp will have the effect of reducing landprices to £0 over the longer term.

Are you really saying that you'd wait it out? I suggest that the smart money would move in the opposite direction.

oh and the laws of supply and demand only work in free markets, as the housing market isn't a free market these rules don't apply

Of course the price of farm land would go up, from the present £10k/acre. We have already settled that. Why did you go back to that?

Don't you think we would have a construction boom here in the south east? I am pretty sure we would have one here in Sussex. Don't you think so?

[Tired of Waiting]

I've read some of the thread and am largely in agreement with Chef and stars on this.

I'm sure one could construct a nifty theoretical land value equation based on pi and the radius of a circle in the event of no planning laws.(but where constraint is determined by the existing built environment and current use)

Are you saying that you don't think a house supply increase would press prices down?? Really?? So you too don't "agree" with supply and demand??

Sorry HAM, but I don't believe you. I've read some of your previous posts, and I know that you know this much.

[Authoritarian]

I've read some of the thread and am largely in agreement with Chef and stars on this.

I'm sure one could construct a nifty theoretical land value equation based on pi and the radius of a circle in the event of no planning laws.(but where constraint is determined by the existing built environment and current use)

It could easily be done with todays technology. You only need to gather accurate information at a few points to be able to plot the values in the surrounding locations, no armies of government bureaucrats or life-zapping tax returns to fill out, and an end to companies acting as unpaid tax collectors for the state.

It would be easy peasy, if it wasn't for the controversy it would cause.

Edited March 6, 2011 by Chef

[Riedquat]

oh and the laws of supply and demand only work in free markets, as the housing market isn't a free market these rules don't apply

In a free market demand can still go flying upwards against all reason if the "You must buy this at any cost!" mindset arrives, and even without that the supply and demand part can still hold (although it's been a minor contributor towards HPI) - if one can move it'll adjust to the other.

[Authoritarian]

Of course the price of farm land would go up, from the present £10k/acre. We have already settled that. Why did you go back to that?

Don't you think we would have a construction boom here in the south east? I am pretty sure we would have one here in Sussex. Don't you think so?

The UK and many other countries have already experienced construction booms during the course of this cycle and the last, which is why there are condos sitting out in the middle of nowhere gather dust and falling to pieces. Suffice to say the boom didn't solve anything, in fact it added to the bubble as it drew even more money in.

You cannot make housing affordable when you sit it upon expensive land, we agree that pp increases land prices so your leap of faith about the free market kicking into gear seems unwarrented.

[Tired of Waiting]

The UK and many other countries have already experienced construction booms during the course of this cycle and the last, which is why there are condos sitting out in the middle of nowhere gather dust and falling to pieces. Suffice to say the boom didn't solve anything, in fact it added to the bubble as it drew even more money in.

Now you are arguing dishonestly.

As you know too well, the UK did not have the construction boom experienced in other countries. You mudling the two "The UK and many other countries" was rethorical dishonesty.

You cannot make housing affordable when you sit it upon expensive land, we agree that pp increases land prices so your leap of faith about the free market kicking into gear seems unwarrented.

Second: It was clear that we agreed that the price of agricultural land would go up, but from the current ridiculously cheap £10k/acre.

Third: You are still avoiding to answer the question:

"Don't you think we would have a construction boom here in the south east? I am pretty sure we would have one here in Sussex. Don't you think so?"

Please do answer this question. It is a central point. And therefore a fair question.

[Tired of Waiting]

I think the question arises as to 'where?'.

If the centre is already built up with sky scrapers, (...)

Sorry, big misunderstanding there. We were not talking about central London. We were talking about the countryside in the south-east. In my case, about West Sussex.

[Authoritarian]

Now you are arguing dishonestly.

As you know too well, the UK did not have the construction boom experienced in other countries. You mudling the two "The UK and many other countries" was rethorical dishonesty.

If you'd read anything into U.S construction booms you'd realise that I wasn't "arguing dishonestly" but merely pointing out the facts, construction booms are synonymous with booms in land prices and so rarely end well, that's why I think you're being naive to tout these forces as the UK's saviour. You're inadvertantly playing into the spectulators' hands.

Second: It was clear that we agreed that the price of agricultural land would go up, but from the current ridiculously cheap £10k/acre.

Third: You are still avoiding to answer the question:

"Don't you think we would have a construction boom here in the south east? I am pretty sure we would have one here in Sussex. Don't you think so?"

Please do answer this question. It is a central point. And therefore a fair question.

You're still missing the point. Even if housing were built on every square inch of the mainland prices still wouldn't reduce because there's a cartel in land ownership that prevents people from accessing those homes. The landowners would always be able to charge monopoly prices for access because the non-owners wouldn't be free to replace their services.

Edited March 6, 2011 by Chef

[Tired of Waiting]

(...) Your vision of your very own cottage in a field in the Sussex countryside doing no-one else any harm has nightmare connotations to me as our world is progressively brutalised by over development.

Where did you get that from?!?!?!?! Firstly, I've been arguing for terraced houses. And I would much prefer a comfortable (just not too narrow, like those 4m-wide things. 6m-wide would be perfect for me/my [intended] young family) around a market town than a your "cottage in the countryside". Secondly, our real main preference would be to move back to London. We do like, love, miss a big, huge city, with plenty of life in it.

So, you got it completely wrong, "on many levels" (god I hate this expression )

With development - does it matter where you start?

Let's consider what's happened to all the former market towns of Surrey that fall within the M25. Look at Woking, Guildford, Kingston etc etc. These were sleepy market towns when I were a youth. They are now mini Croydons as population demands and commercial development has marched inexorably on.

I've been in Guildford a few times, but I am not too familiar with it. But it seemed like a very nice town to me.

If you are thinking about council estates, I completely agree with you that they are a national disaster, both in terms of architecture and also in terms of (tragically bad) social engineering.

Towns can be very nice. Suburbs can be very green. It is all a matter of competent urbanism - a professional University degree, in most other countries... Garden suburbs are a very nice place to raise a family.

Look HAM, it is all a matter of intelligence+knowledge+sanity+honesty+empathy, or, stupidity+ignorance+insanity+dishonesty+selfishness.

Simple really.

[Authoritarian]

ToW, do you understand what a free market is? Because the definition you're using is woefully inadequate.

[Tired of Waiting]

If you'd read anything into U.S construction booms you'd realise that I wasn't "arguing dishonestly" but merely pointing out the facts, construction booms are synonymous with booms in land prices (...)

For a while, then prices crash, like it has happened in the USA and Ireland.

And you know that.

And you carefully avoided it, in your post.

You are distorting your own arguments Chef. This is waste of your and mine time.

Do you really want learn economics? Do you want to understand the world? Or do you just want to build a set of beliefs, a quasi-religious world view?

Don't deny facts. Follow them, wherever they take you. It may hurt for a while, but in the long term it is better than to clutch at straws.

You're still missing the point. Even if housing were built on every square inch of the mainland prices still wouldn't reduce

Just read what you have just written there. Really. Read it again now.

You are making a fool of yourself. In public. Please stop.

[Authoritarian]

For a while, then prices crash, like it has happened in the USA and Ireland.

And you know that.

And you carefully avoided it, in your post.

You are distorting your own arguments Chef. This is waste of your and mine time.

Do you really want learn economics? Do you want to understand the world? Or do you just want to build a set of beliefs, a quasi-religious world view?

Don't deny facts. Follow them, wherever they take you. It may hurt for a while, but in the long term it is better than to clutch at straws.

Just read what you have just written there. Really. Read it again now.

You are making a fool of yourself. In public. Please stop.

A free market system only works when the supply is able to satisfy demand, our current land tenure system drives a great big wedge inbetween that beneficial relationship so people end up paying over the odds for housing.

A free market doesn't just mean having lots and lots of stuff.

Edited March 6, 2011 by Chef