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Proposal To Let The Public (Council) Capture Planning Value Uplift

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http://www.estateagenttoday.co.uk/news_features/New-land-auctions-trial-comes-under-attack

Basically landowners are asked to submit the price they are willing to sell their farm/brown field land to the council and then council

have the right to buy the land and then grant planning permission and hence capturing the majority of the planning value uplift.

Personally, I think land owner should share a small chunk of the uplift (circa <25%) to encourage them to sell (otherwise, others will)

One step closer to HK model. One step to discouraging the monopolies. But let's see how the Vested Interest respond...

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http://www.estateagenttoday.co.uk/news_features/New-land-auctions-trial-comes-under-attack

Basically landowners are asked to submit the price they are willing to sell their farm/brown field land to the council and then council

have the right to buy the land and then grant planning permission and hence capturing the majority of the planning value uplift.

Personally, I think land owner should share a small chunk of the uplift (circa <25%) to encourage them to sell (otherwise, others will)

One step closer to HK model. One step to discouraging the monopolies. But let's see how the Vested Interest respond...

The council just need to do a compulsory purchase at agricultural rates (+compensation).

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It is an idea I've been going on about for years.

Under the current system you have landowners who have a field worth about £10k.

If they secure planning permission then the land is worth about £1m.

They've done nothing to the land to earn the planning gain - but it is like a lottery win for the land owner paid for from the working lives of the people who buy the houses.

The current system is open to massive abuse too - I've posted before about a council near me who decided to build an entire new town on land owned by the brother of the leader of the council.

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http://www.estateagenttoday.co.uk/news_features/New-land-auctions-trial-comes-under-attack

Basically landowners are asked to submit the price they are willing to sell their farm/brown field land to the council and then council

have the right to buy the land and then grant planning permission and hence capturing the majority of the planning value uplift.

Personally, I think land owner should share a small chunk of the uplift (circa <25%) to encourage them to sell (otherwise, others will)

One step closer to HK model. One step to discouraging the monopolies. But let's see how the Vested Interest respond...

Anything that increases supply - where it is needed - would be a good thing. But I am not sure this system will do that.

I agree that most of the planning gain should go to the public purse. Particularly nowadays, where:

According to a paper published in 2007 by the Centre Forum think tank, the value of a hectare of land in the south-east rises 400 times when planning permission is granted.

I see this happening around here all the time. Agricultural land is worth less than £10k/ acre. But with planning it can go above a million pounds.

Profits at this level are just a form of lottery, totally unjustifiable, totally undeserved, and just a consequence of decades of market distortions by planning blockage - particularly here in the south.

( BTW, I am not familiar with the situation in the north of the country, many forum members tell us that there is no shortage of housing there, but here near the south coast there is a huge shortage of houses, from Sussex to Cornwall. )

I think the best system should harvest the best aspects of market indicators and competent town planning (if we have any...). And realistically, a financial reward to the local councils is a necessary way to "motivate" them.

Perhaps a city/town could start by indicating the best area for its expansion, then inform the current owners, and offer them a small share of the planning gains (10%?), and then auction the land to developers? Land owners that don't agree could have their land compulsorily purchased - and just to be nice to them, councils could pay a little above market value (5%?). I bet most would opt for the "voluntary" 10% share :D

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The council just need to do a compulsory purchase at agricultural rates (+compensation).

Or that. :D

I am not familiar with the current legal procedures for compulsory purchase, but I guess (bet?) they take years, and cost a fortune.

If this is the case, we would need new legislation to streamline compulsory purchase procedures - too un-Tory.

Then again, only Nixon could have gone to China.

Nah, still, too un-Tory, way out. Impossible.

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http://www.estateagenttoday.co.uk/news_features/New-land-auctions-trial-comes-under-attack

Basically landowners are asked to submit the price they are willing to sell their farm/brown field land to the council and then council

have the right to buy the land and then grant planning permission and hence capturing the majority of the planning value uplift.

Personally, I think land owner should share a small chunk of the uplift (circa <25%) to encourage them to sell (otherwise, others will)

One step closer to HK model. One step to discouraging the monopolies. But let's see how the Vested Interest respond...

Trouble is what will the LA do with the money spend it on allowances and fat cat wages and pensions?

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It is an obvious principle that the commercial value added to land by the decision of a public authority, supposedly acting purely in the public interest, should accrue to the public purse, not to those who happen to own the land at the time.

The same argument applies to the electronic money-digits typed into existence at virtually no cost to themselves by commercial banks. These intrinsically worthless digits immediately acquire the same purchasing power as legal tender. This conferred value (known as seigniorage) should by the same token (pun intended) be credited to the public purse.

The Bank Charter Act of 1844 ensured that this became the case for all paper banknotes but the now overwhelmingly dominant electronic form of commercially issued money has so far escaped the public capture of its existential value.

It is high time that this expensive and economically debilitating anachronism was corrected:

http://www.positivemoney.org.uk

Edited by The Spaniard

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http://www.estateagenttoday.co.uk/news_features/New-land-auctions-trial-comes-under-attack

Basically landowners are asked to submit the price they are willing to sell their farm/brown field land to the council and then council

have the right to buy the land and then grant planning permission and hence capturing the majority of the planning value uplift.

Personally, I think land owner should share a small chunk of the uplift (circa <25%) to encourage them to sell (otherwise, others will)

One step closer to HK model. One step to discouraging the monopolies. But let's see how the Vested Interest respond...

I don't see how this leaves the uplift with the council.

If the council "invite" people to submit prices to sell land which they KNOW will be given PP after the council have bought it, most people are going to submit a price which prices in most of the uplifted value - why would anybody other than the village idiot do otherwise?

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(...) electronic money-digits typed into existence at virtually no cost to themselves by commercial banks. (...)

That is not exactly how it happens. Please take a look here:

http://www.housepricecrash.co.uk/forum/index.php?showtopic=158901&view=findpost&p=2919869

Central banks have failed to regulate the credit bubble.

I am not saying that bankers are not greedy bastards, but this huge property/credit bubble happened mainly since 2002 or 03, and mainly in Britain and America, and bankers didn't start being greedy bastards only in 2002, and not only American and British bankers are greedy b@stards - bankers in all countries are greedy b@stards.

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Landowners often want to sell but for the plannning permission issues. One near my folks place accepted £250k for land for 40 semis to be built on (good sized plots too, bigger gardens than private new builds, proper front gardens, good parking provision) the council agreed on the basis that they were social housing.

Then the NIMBYs got involved. Nothing built.

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Why would landowners sell? If they are not trying to sell now, there seems no extra benefit to sell under this scheme.

When I have looked at land with planning permission, it always seems to be already pretty described as to exactly what can be built. I think a better scheme would be to have a 'consent to build' on land that describes how many and of what size and stories can be built, then it is up to the builder to put in detailed plannings. In this way the landowner gets am easy medium uplift, the council then get a large payment from the builder which covers the final uplift to full planning consent. The builders get either the pleasure of living thier or selling it on. If you see what I mean.

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Anyway, the proposal, as it stands sounds a lot like the land development taxes of the past.

Liebour introduces the tax, fails to help in any meaningful way, next tory govt repeals it.

We need to designate areas for development, apply a land value tax for vacant land, then see how quickly it gets developed. Lots of construction jobs created, zero public expenditure necessary, added wealth in new buildings.

At least try something new.

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I don't see how this leaves the uplift with the council.

If the council "invite" people to submit prices to sell land which they KNOW will be given PP after the council have bought it, most people are going to submit a price which prices in most of the uplifted value - why would anybody other than the village idiot do otherwise?

Obviously, the land will be auctioned off as land with planning permission.

Council buys @10k per acre, grant planning, sell for £100k per acre.

That is why I say the landowner should get to keep some of the uplift, so that if they don't sell, their neighbour will.

It is abit like a reverse auction really..if you don't cut your price, your competitor will and you will loose out the whole thing.

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Obviously, the land will be auctioned off as land with planning permission.

Council buys @10k per acre, grant planning, sell 10 plots for £100k each .

(...)

Down here, near the south coast, this is more realistic. I am not kidding.

Edit: Perhaps the compensation the land owner should get should be based on some extra over the current market value, without planning. It could even be a high number, like 20% extra, or even 50%, or even 100% = double the price. They would not have any grounds to complain.

Whatever increased value the planning consent generates should be channel to the local authority who generated this extra value. Fair?

Edited by Tired of Waiting

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Trouble is what will the LA do with the money spend it on allowances and fat cat wages and pensions?

I think that the real problem is how are corrupt council officials who vote for planning permission going to get their bung if the uplift from the decision falls into the hands of benevolently minded public officials?

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I think that the real problem is how are corrupt council officials who vote for planning permission going to get their bung if the uplift from the decision falls into the hands of benevolently minded public officials?

Are there any benevolent minded public officials :P ?

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Are there any benevolent minded public officials :P ?

At most they would pander to the local NIMBYs.

I think this government (being a bit more realistic than the previous one regarding the public sector and human nature) is trying to set up a system of financial benefits for the councils, as incentives for granting planning permits.

Some in this government (Vince Cable for sure, plus probably a few others) do understand that high property prices are economically counter productive for the nation as a whole in the long term (please see my sig., below). The problem they have is that most voters have a vested interest in property prices, and many others want high Housing Benefits (LHA).

The current political system (from the voters up) is working against cheaper housing - and has done so for almost a decade.

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Empty houses.... thousands of the buggers.

Building more houses doesn't make any sense when people are allowed to buy and then abandon existing buildings. Fine the owners, confiscate them with no compensation... do something, anything to fix the problem.

We can go a huge way to solving the shortage of homes simply by using what we've already got... surely?

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Empty houses.... thousands of the buggers.

Building more houses doesn't make any sense when people are allowed to buy and then abandon existing buildings. Fine the owners, confiscate them with no compensation... do something, anything to fix the problem.

We can go a huge way to solving the shortage of homes simply by using what we've already got... surely?

The shortage is mainly in the south, and the empty homes are mainly in the north.

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Plus, NIMBY implies someone trying to stop development on land neighbouring theirs. What about people who own land and want to stop development? Builders already have huge land banks. Why don't they build on it?

Herein lies the problem with this whole idea... After the councils have bought this land, who will they be selling to?

If they sell to developers, what is stopping those developers from using this as an opportunity to expand their already vast reserves and gaining even greater control over Building land supply?

It will be in their and in local VI government employees interests to continue to sit on the land, drip-feeding their new-builds out to buyers at extortionate prices.

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(...) After the councils have bought this land, who will they be selling to? (...)

That is a very good point.

In many or even most other countries the practice of servicing and selling building plots is wide-spread. All property agents and websites have sections for serviced building plots. Individuals buy these plots, hire an architect and/or a builder and have their homes designed and built for them. And I am not talking "grand design" here. I am talking normal family homes. There are plots of all sizes, and in different price areas.

I really can't understand why this doesn't happen in Britain. It can't be market blockage, or even a cartel - impossible to organise on a country-wide basis. It has to be something government-dependent, such as land policies, laws, planning system, or whatever.

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As ever, the problem is, that our planning laws are so restrictive so the planning value uplift is large.

If it is my field - why shouldn't I be able to develop it into houses (I should have to pay for the sewage system being connected etc) the problem is that the decision for whether or not to build houses somewhere resides with a small and therefore inevitably corrupt groups of people.

Build houses where people want to buy them, not where the council thinks they should go. (planning the economy doesn't work!)

It is why britain (uniquely) is now building small er houses than we were 100 years ago!

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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