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False Scarcity Not Planning To Blame For High House Prices

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Another journalist on the case of high house prices..

http://www.independent.co.uk/voices/comment/the-stitchup-that-keeps-homes-unaffordable-8778390.html

So how does a government which has to pretend to be promoting housebuilding and an industry which wants to keep homes in short supply fool the public? By conspiring together to blame the “planning system”, that’s how. This has been going on for decades and the “planning system” has been an easy target. After all, it can’t answer back.

But the argument is rubbish. The proportion of planning applications approved by councils is more than 80 per cent. Of the rest, around 80 per cent are approved by the appeals inspectorate. So under the present arrangements, 95 per cent of applications get through. And at any time, there are sufficient planning permissions out there for around three years’ supply at the current dismally low rates, set by the builders. Hardly a broken system in need of radical reform, but let’s not let the facts get in the way of a good excuse.

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Another journalist on the case of high house prices..

The problem is that the councils are hamstrung by central government rules as to what may or may not get planning permission. The big builders knew this, as did architects.

No one is going to bother submitting a planning application unless they had good reason to believe that it would be approved.

Edited by ChumpusRex

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She's just another sick in the head NIMBY (with a bit of commie rhetoric in there too) who takes pleasure in obfuscation, or else is pig ignorant. Looking at her mugshot, id say the latter, oink oink (yes, a cheap/low shot, but these rent seekers make me MAD)

Yes, if I look on a councils planning website, most planning applications DO INDEED get approved. Because our planning system is so overbearing you have to apply to have a conservatory, erect a garage, install a sign for your business and so on. The VAST MAJORITY of planning applications are not even for houses or housing development.

Narrow it down to permits for RESIDENTIAL DEVELOPMENT and see what it comes out as...

Plus, most people are too disheartened to even dare to apply for planning permission. They either have to buy the land without, only to not receive permission, or else try and buy the land after for an obscene price.

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Yes, reads like a crock of crap to me. She's basing her assumptions on the big developers being able to maintain a good degree of control over development if planning restrictions were significantly eased, where it seems clear to me that all manner of self-builders and other, smaller companies would build were it a case of simply buying a plot safe in the knowledge that planning permission could be given at minimal hassle.

Govt could purchase a field of agri land on the open market, divvi it up into serviced plots and flog it to self-builders. What's not to like?

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Yes, reads like a crock of crap to me. She's basing her assumptions on the big developers being able to maintain a good degree of control over development if planning restrictions were significantly eased, where it seems clear to me that all manner of self-builders and other, smaller companies would build were it a case of simply buying a plot safe in the knowledge that planning permission could be given at minimal hassle.

Govt could purchase a field of agri land on the open market, divvi it up into serviced plots and flog it to self-builders. What's not to like?

True, while i doubt she actually believes what she writes - given the ES is a right wing pro-private ownership tory mouthpiece, stuff like "It’s a business, and it is controlled by the profit motive. The only priority is to sell the product for the highest possible price, and you don’t do that by increasing the supply."

is just laughable...Its Walmart that is the multibillion dollar enterprise that got that way by 'stacking it high, selling it cheap' not some overpriced fortnum and mason type outfit who 'restrict supply'

Housebuilders know this. They would build more...if land was affordable and not limited by rent seeking crooks of which she is probably a part of, or sympathizer of. Its their input costs that are the reason they charge so much. If what she was saying had a grain of truth, demonstrably profitability of housebuilders would be sky high...they arent, most of the time their profitability trails other sectors.

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True, while i doubt she actually believes what she writes - given the ES is a right wing pro-private ownership tory mouthpiece, stuff like "It’s a business, and it is controlled by the profit motive. The only priority is to sell the product for the highest possible price, and you don’t do that by increasing the supply."

is just laughable...Its Walmart that is the multibillion dollar enterprise that got that way by 'stacking it high, selling it cheap' not some overpriced fortnum and mason type outfit who 'restrict supply'

Housebuilders know this. They would build more...if land was affordable and not limited by rent seeking crooks of which she is probably a part of, or sympathizer of. Its their input costs that are the reason they charge so much. If what she was saying had a grain of truth, demonstrably profitability of housebuilders would be sky high...they arent, most of the time their profitability trails other sectors.

Agreed.

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It's about time some new players enter into the house building sector.

Massive opportunity to cater for huge, monumental demand from the 20 and 30 somethings.

C'mon guys. We are waiting for you! We hate Bovis, Persimmon, Barratt, Wilson etc etc. They've failed the country. They don't want our business. New blood needed to sweep away the old rubbish.

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eabc6668b514e2274cb9ae6614dc401e.jpeg

Edited by DogTired

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True, while i doubt she actually believes what she writes - given the ES is a right wing pro-private ownership tory mouthpiece, stuff like "It's a business, and it is controlled by the profit motive. The only priority is to sell the product for the highest possible price, and you don't do that by increasing the supply."

is just laughable...

I don't think it's as simple as that.

There is always a restricted supply of land, all planning restrictions do is to make this worse. In the absence of planning, the land-market would be the same, but on a different scale.

Also, I think you are wrong about the business model of our current home builders, and that they really are just land hoarders.

You're right that if you ended planning laws tomorrow, and we should, then you would quickly see entirely new, Walmart-like building companies appear but they'd be different companies. Prices would fall, and the economy would get a massive boost.

In 10 or maybe 20 years, you'd be back to pretty much where we are now, with all the useful land already built on, and hoarding would be the profitable business model again.

Even if we focus on the short-term crisis, I think you underestimate the interplay between builders, planners and the planning regime.

What I have seen of the planning system is extremely corrupt, but probably works quite well for the well established large-scale developers. And if you claim that these companies are simply subservient to the Government, Osbrown's Help-to-sell pretty much proves you wrong.

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It's about time some new players enter into the house building sector.

Massive opportunity to cater for huge, monumental demand from the 20 and 30 somethings.

C'mon guys. We are waiting for you! We hate Bovis, Persimmon, Barratt, Wilson etc etc. They've failed the country. They don't want our business. New blood needed to sweep away the old rubbish.

image_notfound_240x240.png

354px-Ikea_logo.svg.png

eabc6668b514e2274cb9ae6614dc401e.jpeg

Unfortunately, the profit goes to the landowner, not the builder, that's kind of the problem. The correct solution is a land-value tax, obviously.

There's money to be made buying land, getting planning permission, and then selling the land, which just goes to show how messed-up and corrupt the whole system is, and where land profits actually come from (they're a government grant).

Short-term, the government could work around the problem by issuing itself planning permission on some cheap land, getting the private sector to build houses and splitting the profits (or some variation of this scheme that I can't be bothered to think through right now, but hopefully you get the idea).

Edited by (Blizzard)

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Expanding the zoned residential land around every town, city and village in the country by 10% overnight would solve the problem. So much building land would be available that it would be fairly worthless - that is the case here in Ireland.

We do have a proper planning system now with lots of land around towns and villages available for building at a fraction of the cost of the

UK.

You would not horde anything that is not valuable. Do you horde empty cornflake packets?

It is 1001% a planning issue.

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Expanding the zoned residential land around every town, city and village in the country by 10% overnight would solve the problem. So much building land would be available that it would be fairly worthless - that is the case here in Ireland.

We do have a proper planning system now with lots of land around towns and villages available for building at a fraction of the cost of the

UK.

You would not horde anything that is not valuable. Do you horde empty cornflake packets?

It is 1001% a planning issue.

Locations are not equivalent. Land in central London, which is mostly used, can't be replaced by land next to the M25. Land by the coast, isn't the same as land on a flood-plain, and so on. For this reason, economically viable locations are always scarce, planning or not.

Ending planning restrictions would help, for a while.

Just to be clear, I am very much against our planning laws - I think it is obscene to prevent families from building decent homes so that a few rich people can enjoy a nice view (and stay rich of course) - but there are more fundamental problems.

Ireland's problems are different, the land there is worthless because it doesn't provide access to the UK economic miracle.

Edited by (Blizzard)

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Locations are not equivalent. Land in central London, which is mostly used, can't be replaced by land next to the M25. Land by the coast, isn't the same as land on a flood-plain, and so on. For this reason, economically viable locations are always scarce, planning or not.

There are many many viable locations left in the UK. Land in London will always be more expensive than outside of London, but much of this is down to infrastructure. Drop in a tube station and the land value goes up.

Ending planning restrictions would help, for a while.

Yes, it would help now to solve the housing crisis, further changes to taxation and bank lending are also required for long term stability.

Ireland's problems are different, the land there is worthless because it doesn't provide access to the UK economic miracle.

Ireland had an economic miracle based on cheap money too. There are many parallels that can be drawn between Ireland and the UK.

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There are many many viable locations left in the UK. Land in London will always be more expensive than outside of London, but much of this is down to infrastructure. Drop in a tube station and the land value goes up.

There are, at the moment, although this is restricted by the transport infrastructure. As I said, ultimately the problem would resurface. The problem of land-scarcity exists in many other countries with much more liberal planning laws.

Yes, it would help now to solve the housing crisis, further changes to taxation and bank lending are also required for long term stability.

Can't disagree with that.

Ireland had an economic miracle based on cheap money too. There are many parallels that can be drawn between Ireland and the UK.

No, our miracle is special. Britain is special.

WileECoyote.jpg

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I don't think it's as simple as that.

There is always a restricted supply of land, all planning restrictions do is to make this worse. In the absence of planning, the land-market would be the same, but on a different scale.

Also, I think you are wrong about the business model of our current home builders, and that they really are just land hoarders.

You're right that if you ended planning laws tomorrow, and we should, then you would quickly see entirely new, Walmart-like building companies appear but they'd be different companies. Prices would fall, and the economy would get a massive boost.

In 10 or maybe 20 years, you'd be back to pretty much where we are now, with all the useful land already built on, and hoarding would be the profitable business model again.

Even if we focus on the short-term crisis, I think you underestimate the interplay between builders, planners and the planning regime.

What I have seen of the planning system is extremely corrupt, but probably works quite well for the well established large-scale developers. And if you claim that these companies are simply subservient to the Government, Osbrown's Help-to-sell pretty much proves you wrong.

Well the bolded bit was her quote...land is only hoarded because the planing system encourages it, plus there is the supposition that it will go up in value due to exponential credit increases anyway. If planning permissions really were plentiful, this wouldnt happen.

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Unfortunately, the profit goes to the landowner, not the builder, that's kind of the problem. The correct solution is a land-value tax, obviously.

There's money to be made buying land, getting planning permission, and then selling the land, which just goes to show how messed-up and corrupt the whole system is, and where land profits actually come from (they're a government grant).

Short-term, the government could work around the problem by issuing itself planning permission on some cheap land, getting the private sector to build houses and splitting the profits (or some variation of this scheme that I can't be bothered to think through right now, but hopefully you get the idea).

I think a LVT (while I am personally in favour of it) would be difficult to impose, as it would be a change that would affect everyone, and contrary to what they say, people dont tend to like change. A more democratically likely charge to stop hoarding would be to charge council tax on a property when permission is given, not when building is completed. That would only affect 1% or so of the electorate.

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Almost 400,000 homes in England have been given planning permission but have yet to be built, research suggests.

The Local Government Association (LGA) study found that little progress had been made in reducing the backlog over the past year.

http://www.bbc.co.uk/news/uk-england-23790071

In the years after WW2 millions of homes were built with an economy heavily in debt but that didn't happen in a 'free market' where the priority is maintaining high house prices.

Edited by campervanman

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Almost 400,000 homes in England have been given planning permission but have yet to be built, research suggests.

The Local Government Association (LGA) study found that little progress had been made in reducing the backlog over the past year.

http://www.bbc.co.uk...ngland-23790071

In the years after WW2 millions of homes were built with an economy heavily in debt but that didn't happen in a 'free market' where the priority is maintaining high house prices.

We need to return to State directed capitalism, not a corporate directed State

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We need to return to State directed capitalism, not a corporate directed State

Too late I'm afraid. The corporates control pretty much everything including the mainstream media which in turn controls peoples thinking and works to prevent anything that might change the game.

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Govt could purchase a field of agri land on the open market, divvi it up into serviced plots and flog it to self-builders. What's not to like?

Being crowded out/out bid by the build to letters?!

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Land is a finite commodity......say the price of land came right down so that every living working person in this country could buy and build and pay in full something for their family to live in at say three times todays income in cash or in less than 25 years......how will that solve anything...once the debt is completely destroyed/paid for people would only want to buy more if they could.......you could cover the land quite easily in not very much time with all sorts of buildings....more people would want more than one and more people would move here to buy and build one or more.

Say then all the land was sold and built on and no debt was outstanding because everyone had repaid all their debts after paying for it......surely they would not want to sell it for what they bought it for to new buyers......it would be worth more to them to make use of it or to rent it out only. ;)

Edited by winkie

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Less houses, more profit. Kerching!

builders.jpg

+1

Yep.

We shouldn't really call them house builders any more. They only build a token amount just to give that impression, often inviting the media to film it for propaganda.

To be real house builders they would be now building something like 2 Million homes in a year. But they're just ponzi men with no guts these days.

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