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Exclusive: Builders Use Red-Tape Reforms To Duck Deals On Affordable Homes

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http://www.independent.co.uk/news/uk/politics/exclusive-builders-use-redtape-reforms-to-duck-deals-on-affordable-homes-9275609.html

Developers are using a new law intended to cut bureaucracy and kick-start the economy to challenge their obligation to contribute to the building of affordable new homes, The Independent can disclose.

Figures seen by The Independent show that the Planning Inspectorate is considering 10 appeals lodged by house builders which aim to cut or eliminate planning restrictions by claiming they would make schemes unviable.

It comes amid a rebellion by some Tory-run local authorities against the policy of scrapping council-set quotas for affordable homes, and claims that the Coalition has tilted the process too heavily in the big developers’ favour.

Of three appeals dealt with by the inspectorate to date, two have found in the developers’ favour. In the first, Redrow Homes, which recently reported a doubling of its group’s half yearly pre-tax profits to £47.5m, successfully challenged Torridge District Council in Devon over its stipulation that 60 out of 151 new homes it was planning there should be affordable.

Who wants to build affordable homes when there's bigger profits to be had?

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Figures seen by The Independent show that the Planning Inspectorate is considering 10 appeals lodged by house builders which aim to cut or eliminate planning restrictions by claiming they would make schemes unviable.

So if they're affordable they're unviable.

So they're only viable if they're unaffordable.

Crazy economics.

Edited by billybong

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So if they're affordable they're unviable.

So they're only viable if they're unaffordable.

Crazy economics.

:D

Yeah, poor people can't afford to buy a house, the builders, with the banks and governments help, want to max out the price the rich can pay.

What then ?

Collapse.

The system is flawed. People need to be able to buy their own land and build or have society ( council ) owned housing. These big building companies building profit making estates away from any commerce will be proved to be a BIG mistake. Immigration needs to stop, NIMBYs need to be put in their place, banks need to be regulated and corrupt politicians put in jail for the rest of their lives. Productive work needs to be rewarded. Benefits set at a sustenance level. it's that simple.

Edited by TheCountOfNowhere

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The Indy may have seen figures no-one else has but the story is hardly exclusive. See the Grauniad for instance http://www.theguardian.com/uk-news/2014/apr/21/tory-council-rejects-affordable-homes-concession

Also, developers building the Tories' new towns won't have to provide any affordable homes.

http://www.theguardian.com/society/2014/apr/21/new-garden-cities-low-cost-homes

Definition of "affordable homes" here, in case anyone's confused

http://www.deliveraffordablehomes.co.uk/coreareas/nationalpolicy/q1/

Basically, developers, encouraged by the Tories in this instance, want to build only units for which they can screw the populace for as much money as possible. If the populace can't acquire the money to buy them for full whack (e.g. through inheritance, debt), the developers don't want to build them. What a surprise, eh?

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Are the building companies too big to be allowed to fail as well now - that they also have to be subsidised one way or another.


.

Edited by billybong

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Are the building companies too big to be allowed to fail as well now - that they also have to be subsidised one way or another.

.

Would you see tanks on the street if one of the big building companies went under ?

I don't think so, so no, I don't think they are too big too fail.

It does beg teh question though, why are they being so heavily subsidised ? A back passage banker bailout ?

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Would you see tanks on the street if one of the big building companies went under ?

I don't think so, so no, I don't think they are too big too fail.

It does beg teh question though, why are they being so heavily subsidised ? A back passage banker bailout ?

+1

Perhaps in return for special treatment their tax rates should be increased to balance out their "hold on the taxpayer and house buyer" position.

A "hold on the taxpayer and house buyer tax" - HOTTAHBT.

Edited by billybong

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The cost of the houses is immaterial compared to the land the homes sit on. Removing the tight planning restrictions and allowing builders to build where the demand is will lower the total cost of new homes.

For example in and around Bristol there is a lot of demand, but because the governments policies, no new homes are allowed to be constructed here. Instead people commute hundreds of miles per week from Weston-Super-Mare.

If the current planning restrictions were abolished, then builder could pick up green field sites cheaply and would compete on finished house prices. The end result would be far less pollution from commuters and far cheaper new house prices.

Any one campaigning about building on green fields whilst people are 'forced' to commute hundreds of miles per week is frankly an idiot. In environmental terms is far more eco efficient to build on the greenbelt and green field sites near major cities like London and Bristol. Preventing such building and forcing people to commute is pure profiteering by the government for excise duty.

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Hmmm... There's legislation - almost certainly about to be abolished since it is for the good of low income families - commonly referred to as Section 106 payments where developers have to provide social or (un) affordable rent housing within their actual development, or as close as possible. Otherwise they have to make a contribution to the LA to build for a money equivalent. These payments are negotiated away with great ease already, or else developments happen in expensive areas and their associated S106 housing gets built somewhere cheap. The developers cry that to do otherwise affects their 'marginal viability' and renders development unprofitable. Meanwhile great luxurious palaces of marble and chrome and glass are rising like mushrooms all over London. How exceedingly generous of developers to create these new homes at such personal sacrifice and loss of money to themselves. They must do it for love. :wub:

They say planning laws affect their profits.
They say that publicly owned land is unaffordable for them to buy to build on - so they are given it on a 'buy now, pay when you've got the money' basis so it won't affect their profitability.
They say that S106 is affecting their profit margins.
And the publicly owned land - almost always owned outright - could be used for low cost homes, as land value is such a major contributor to cost. Instead it is sold for a tenth of its value to people who will build, or not, as they see fit, artificially controlling the market supply. And that supply is overwhelmingly now in the private rented sector. Because that way you make your money twice over. Tenant pays your build/purchase costs and you maintain the capital asset. It doesn't even matter if the market drops - it's just an added opportunity to add to your property portfolio on the cheap.

And property is expensive because there is no cap on lending and the banks have artificially distorted the market by creating to much money for asset acquisition and not enough into real economy production. The banks don't want a glut of cheap housing, it will devalue their holdings.


**RANT OVER** :)

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Builders shouldnt be having to get involved in "affordable housing" scam.

Let them build for the private market thus meaning buyers arent funding these privately run affordable housing companies with endless bureaucrats earning a vast fortune out of their non job.

And if the government or local council wishes to build affordable housing then do so on their own accord.

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Sorry, me again :)

Councils talk more about 'affordable' developments (80% of market rent) than council rents. At the moment councils farm the building out to developers on a part private/ part council basis when they do build at all. Guess which is the largest part? They say they have no choice because it can't be funded any other way.

Developers know that local residents rarely succeed in challenging planning applications. And if they think they might then they employ people to go round signing petitions in favour of the development. This low cost action usually gathers them many times more votes in favour than there are against. In London the foul and pestilent Johnson overrules any refusals by local authorities to restrict development through use of planning regs. And the latest wizard wheeze is to attract a primary free school to your plans. There's a chronic shortage of primary school places in certain areas so you bang in your unsatisfactory planning application, it gets refused by the LA, you attach an equally unsatisfactory 'primary school' to your plan. Johnson approves it without consultation on the grounds that the schools are fulfilling a need. I know I'm being London centric, but that's part of the point. This artificial scarcity - which gets laid at the door of all but the right reasons - works absolutely to the advantage of the rich and powerful. Why the f*** should they care if the low paid are adequately housed?


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Developers are using a new law intended to cut bureaucracy and kick-start the economy to challenge their obligation to contribute to the building of affordable new homes,

The most interesting thing about that sentence is the fact that it was almost certainly written without a trace of irony or even insight into just how absurd it actually is.

Imagine if this were a car company- " Car Manufacturers are using a new law intended to cut bureaucracy and kick-start the economy to challenge their obligation to contribute to the building of affordable new cars" WTF!!?? :lol:

We would assume these people had lost their minds.

The very fact that we have a debate in this country about where and how to build 'affordable' homes is itself hilarious- but the fact that this debate is presented in these terms by the media without irony or even apparent qualification shows just how deep down the rabbit hole we actually are now.

Also we are forced to conclude that the majority of homes being subsidized by the Chancellors 'Help to Buy' scheme are- by definition- not affordable homes. :lol::lol::lol:

So- to labour the point for comic effect- the taxpayers of the UK are contributing to the building of houses that they cannot afford to buy.

Pure comedy gold.

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