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Ed Miliband Promises Drive To Double Rate Of Housebuilding

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http://www.theguardian.com/politics/2013/dec/15/ed-miliband-housebuilding-labour-councils-developers

Profiteering property developers that hoard land and councils that block developments will be swept aside in a "non-stop drive" to more than double the number of homes being built each year in England, Ed Miliband will promise on Monday.

Attacking "stick-in-the-mud councils", the Labour leader will say he would order a national planning inspectorate to give priority to local authorities that want to expand if they are being blocked by neighbouring councils refusing to release land.

Under the Labour plans, councils would be empowered to compulsorily purchase land or charge fees if developers fail to build on land for which they have planning permission. Michael Lyons, the chair of Labour's new independent commission on housing and a former BBC chairman, told the Guardian that Britain needed to recapture the postwar spirit when building homes was the national priority.

Then Ed all you'll need to do is find people with sufficiently high wages to buy...

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They should bring back mass social house building to collapse the buy to let market, drive down rents and keep HPI down as renting will be a credible alternative.

They have the tools with CPO, they spend the money already with housing benefit, it shouldn't take long to start making efficiency savings by pulling social tenants and the taxpayer out from the clutches of speculating banks and BTL landlords.

That's one option for an HPC causing scenario, throw in some plots for self builders and its hard to see this not working. Obviously the nimbys,banks and Tories would hate it.

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There is a great, semi-first comment on that article;

Posted by afcone

I think that, as the average age of a first-time buyer gets ever higher, there will be a tipping point in which high house prices are no longer seen as the UK's route to richness. We're gradually getting there, as more and more people who aren't homeowners realise they're getting stiffed, and as the older generation see children who fail to fly the nest due to the ludicrous income multiples now charged for housing.

In some parts of the world people invest in factories via investments; in the UK we invest in non-wealth-producing assets and sell these to each other using ever-increasing leverage, and call this growth. It would be welcome if that attitude were to change.

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They should bring back mass social house building to collapse the buy to let market, drive down rents and keep HPI down as renting will be a credible alternative.

That would need selfless leaders with some vision and an ability/desire to stand up to the bankers.

They wont do anything of the kind until an event forces them to. What that is and when it will happen is anyone's guess.

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They should bring back mass social house building to collapse the buy to let market, drive down rents and keep HPI down as renting will be a credible alternative.

Nail/Head , it would also create much needed employment , a public asset etc etc etc .

D

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I am probably just being really stupid but every time I read about the need to build homes I wonder what happens when house prices drop given that developers now believe they can't build a house for what it is ACTUALLY worth if the bubble deflated to a level where ordinary homes WERE affordable in relation to wages.

From a simplistic very ordinary uneducated person's perspective (that is someone who can't talk about gold, or bitcoin or waves etc.) if developers think they need £250,000 + for a new build depending on where people live but in small towns in parts of Wiltshire and Somerset £250,000 would buy a 3 bed something (although if you want something a lot more upmarket you are looking at £350,000 plus) then what happens if the market drops?

There is a builder in our area who has a reputation for being a good builder, at peak the properties on an estate they built here were going for £250,000 (2 bed) and £350,000 ish for 3 to 4 bed.

They have recently built an estate a distance from here which was meant to be more "affordable" but not "affordable homes", we went to look at the 3 bed, it was so so tiny, very well built and with touches that you would not get from your regular tin pot new build developer, but we kept being told that certain things were missing in an attempt to keep the price at £199,990. They are due to build another estate in our area, we phoned to ask if it would be like the old estate (unaffordable) or like the recent estate still unaffordable but below £200,000, they said it would be like the old estate.

So it would seem the UK are now in this ridiculous position of ALL homes being "unaffordable" so that developers have to build even more crappy poor standard homes in order to build some so called "affordable" homes even though a LOT of "affordable" homes are completely "unaffordable" by those entitled to buy them (I know of several estates where the "affordable" homes were sold by the developer at full market value because local people could not afford them) And I am thinking about the recent posting about BathNes council who need 5,437 market-value and 3,390 affordable home to be built by 2029 which means they have to sanction d 9,646 market value properties (on green belt) in order for the developers to feel they have made enough on the unaffordable homes to build some crappy unaffordable "affordable" homes (which probably will be crappy leasehold 1 bed or bedsit flats with £500 a year management fees and ground rent)

So what happens if the market adjusts, property falls back to being affordable at reasonable LTV rates at 7% ? And what would have happened if the bubble had not inflated from 1999 to 2007 taking property round here from £80000 to £90,000 to a £190,000 + , would developers have been able to build ALL affordable homes?

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I think that, as the average age of a first-time buyer gets ever higher, there will be a tipping point in which high house prices are no longer seen as the UK's route to richness. We're gradually getting there, as more and more people who aren't homeowners realise they're getting stiffed, and as the older generation see children who fail to fly the nest due to the ludicrous income multiples now charged for housing.

In some parts of the world people invest in factories via investments; in the UK we invest in non-wealth-producing assets and sell these to each other using ever-increasing leverage, and call this growth. It would be welcome if that attitude were to change.

A few years yet but were getting there

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Is it in their manifesto?

If it's not then it's just his gas escaping from either end.

Labour have already established that "Manifesto pledges are not subject to legitimate expectations".

Which was Browns excuse for not giving us an EU referendum.

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Strange really, the glossy leaflet I had through my door from the Chester PPC for the Labour Party specifically took the incumbant Tory council to task for approving planning permission for too many new homes.

But, as someone who is troughing from the taxpayer without even being in Parliament (he rents a London property out to a current Labour MP), one can only expect him to protect his personal interest in high housing costs.

None of them really want to build new homes since this agitates a key voting bloc. They can all burn imo.

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So what happens if the market adjusts, property falls back to being affordable at reasonable LTV rates at 7% ? And what would have happened if the bubble had not inflated from 1999 to 2007 taking property round here from £80000 to £90,000 to a £190,000 + , would developers have been able to build ALL affordable homes?

What happens is that the current builder go bankrupt and the land is bought cheaply by new ones who can then wack up cheap houses. Remember that properties on large scale new builds only cost about £600 / m2 to actual build.

Edited by goldbug9999

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What happens is that the current builder go bankrupt and the land is bought cheaply by new ones who can then wack up cheap houses. Remember that properties on large scale new builds only cost about £600 / m2 to actual build.

So average 3 bed semi is what about 100 m2 (?) + the land, so how much profit would a developer need to survive? (I realise the Q is a bit like how long is a piece of string or how many impulse waves make up a corrective wave , although I am sure waves are a lot more certain if only anyone could understand it)

The "affordable" 2 bed on a local estate which was a bit like the size of a 3 bed but with only 2 beds was priced at £90,000 where the unaffordable 2 beds , which were smaller went for about £160000 at peak and the 3 beds went for £200,000 now adjusted to about £145,000 and £170,000 (quite a big drop in the price of the 3 beds)

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I am probably just being really stupid but every time I read about the need to build homes I wonder what happens when house prices drop given that developers now believe they can't build a house for what it is ACTUALLY worth if the bubble deflated to a level where ordinary homes WERE affordable in relation to wages.

From a simplistic very ordinary uneducated person's perspective (that is someone who can't talk about gold, or bitcoin or waves etc.) if developers think they need £250,000 + for a new build depending on where people live but in small towns in parts of Wiltshire and Somerset £250,000 would buy a 3 bed something (although if you want something a lot more upmarket you are looking at £350,000 plus) then what happens if the market drops?

There is a builder in our area who has a reputation for being a good builder, at peak the properties on an estate they built here were going for £250,000 (2 bed) and £350,000 ish for 3 to 4 bed.

They have recently built an estate a distance from here which was meant to be more "affordable" but not "affordable homes", we went to look at the 3 bed, it was so so tiny, very well built and with touches that you would not get from your regular tin pot new build developer, but we kept being told that certain things were missing in an attempt to keep the price at £199,990. They are due to build another estate in our area, we phoned to ask if it would be like the old estate (unaffordable) or like the recent estate still unaffordable but below £200,000, they said it would be like the old estate.

So it would seem the UK are now in this ridiculous position of ALL homes being "unaffordable" so that developers have to build even more crappy poor standard homes in order to build some so called "affordable" homes even though a LOT of "affordable" homes are completely "unaffordable" by those entitled to buy them (I know of several estates where the "affordable" homes were sold by the developer at full market value because local people could not afford them) And I am thinking about the recent posting about BathNes council who need 5,437 market-value and 3,390 affordable home to be built by 2029 which means they have to sanction d 9,646 market value properties (on green belt) in order for the developers to feel they have made enough on the unaffordable homes to build some crappy unaffordable "affordable" homes (which probably will be crappy leasehold 1 bed or bedsit flats with £500 a year management fees and ground rent)

So what happens if the market adjusts, property falls back to being affordable at reasonable LTV rates at 7% ? And what would have happened if the bubble had not inflated from 1999 to 2007 taking property round here from £80000 to £90,000 to a £190,000 + , would developers have been able to build ALL affordable homes?

It doesn't cost £250,000 to build a house, the developers are lying through their back teeth if they're saying so.

My father designed and built his own self build in 1993/94 with 4 double beds, detached for £50,000. Developers save more money as they can buy materials in bulk and save time by building semis and terraces rather than all detached.

The land with planning permission is the big cost, milliband must be looking at solving this problem if he is talking about CPO if land to build on, I'd wait and see what he does about it when in power, the media would tear him to pieces if he started talking about cheaper housing and land right now. Look at what happened when he mentioned cpo's they started calling him a Marxist and attacking his recently departed father.

Milliband is not new labour btw, that was David milliband. New labour were the Tories in disguise.

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So average 3 bed semi is what about 100 m2 (?)

I was assuming 2 stories so build cost is nearer £300 m2 per single floor space. That figure is somewhat anecdotal i.e. hairedressers boyfriend being a site engineer on a nearby new build site. So that puts the build cost of a 100m2 property at around 30k. Also remember this is 4000+ property build so some serious economies of scale obviously kick in.

Edited by goldbug9999

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There is a great, semi-first comment on that article;

Posted by afcone

"in the UK we invest in non-wealth-producing assets and sell these to each other using ever-increasing leverage, and call this growth. It would be welcome if that attitude were to change."

We are increasingly selling them less and less to each other though as the Ponzi stalls?

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Say what you like about Milliband, at least these sort of subjects are being discussed.

If he stands up one day and says "Lets discuss the great big elephant in the room.....house prices are too high, and must come down" or "It was a credit driven bubble, and won`t happen again in our lifetimes, house prices must come down, we need to get used to it" ...then, and only then would I consider voting for him.

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They should bring back mass social house building to collapse the buy to let market, drive down rents and keep HPI down as renting will be a credible alternative.

They have the tools with CPO, they spend the money already with housing benefit, it shouldn't take long to start making efficiency savings by pulling social tenants and the taxpayer out from the clutches of speculating banks and BTL landlords.

That's one option for an HPC causing scenario, throw in some plots for self builders and its hard to see this not working. Obviously the nimbys,banks and Tories would hate it.

Fix a housing shortage by just building some sodding houses? Crazy talk.

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Say what you like about Milliband, at least these sort of subjects are being discussed.

He's been setting the political agenda for months now and is almost certain to win the GE with a thumping majority.

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What we have got is those with excess requiring a place to park their cash....ie land and buildings, this pumps up the prices for others who require debt to purchase land and buildings........sure building more would help, but to build more requires money ie well paid jobs to purchase them and confidence to buy them.......

Look to the southern EU.....their are thousands of empty properties for sale, some been on the market for years that are not selling.....they are not selling for three good reasons...1. not enough good local jobs that pay enough to buy them 2. not the banks that can afford to lend enough to buy them (not that they want them, well overpriced). 3. Not enough people who will invest their own cash, buying them thinking the price will rise rather than fall further......lots of bargains out there for people in it for the long term, not looking for capital growth or income. ;)

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What we have got is those with excess requiring a place to park their cash....ie land and buildings, this pumps up the prices for others who require debt to purchase land and buildings........sure building more would help, but to build more requires money ie well paid jobs to purchase them and confidence to buy them.......

Look to the southern EU.....their are thousands of empty properties for sale, some been on the market for years that are not selling.....they are not selling for three good reasons...1. not enough good local jobs that pay enough to buy them 2. not the banks that can afford to lend enough to buy them (not that they want them, well overpriced). 3. Not enough people who will invest their own cash, buying them thinking the price will rise rather than fall further......lots of bargains out there for people in it for the long term, not looking for capital growth or income. ;)

If house prices reverted to historic norms in the UK then they would be affordable. The elephant in the room is the cost of land with planning permission. Until landowners are forced to sell at much lower prices and the supply of building land is increased, prices must stay high. Do developers make excessive profits? I don't know, but my guess is they don't, as they have to re-cycle much of the money into their land banks. If land prices were to fall however, many developers will be left with egg on face, having overpaid for land, and of course the banks will be (more) bust etc. You can see why TPTB are desperate to maintain house prices at any cost. The only chance of a 'softer' landing is to build many more low cost houses to rent or buy via housing associations by forcing landowners to sell a % of land with planning to housing associations to develop.

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