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ebull

There IS a Single Magic Bullet mr Hammond. The only reason you won't use it is that it would cost your mates.

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There is a simple easy solution to the housing crisis which the government could implement without it even costing them much if anything.

Allow permitted development at a rate of say one 250m2 house per acre on all land in the UK except national parks and a few green belt type reserved green spaces.

To be fair to the owners of exempted land, perhaps you could tax those who develop at say 100/m2 built and distribute half the proceeds to the exempt landowners whilst using the other half to bring local infrastructure up to a level that can support the new houses.

Simple formulaic system which requires no scroungers and pervcentage merchants to take a cut.
[sorry spurious v slipped in accidentally. could be freudian. decided to leave it]

The infrastructure being available [roads, access to road, drains,water, electric, telecoms and gas ] or possibility to increase capacity at cost to developer should be the only restriction to such permitted development.

This view is slightly different to the enforced one on HPC that existing houses must be available at a crashed price. Of course the possibility to buid your own and possibility to do that on any land will cause many current awful newbuild dross to completely crash. Whilst some one-of-a-kind historical character numbers will at most drop a little due to their scarcity and demand for them.

Hammond today has stated there is no single magic bullet. I believe there is and whilst I agree with his frugality, eye on the deficit and debt, there is no reason not to change the planning system in the way I describe. Unless you're in the pocket of VI-land-with-building-permit-hoarders. Sure you don't know any of those part-of-property-developer-family-Hammond do you? I'm sure that was all before you were reborn as an honest upstanding minister.

Task for anyone on here that fancies it - how many per acre would be needed to provide enough houses?

Again a task for anyone on here that fancies it - create a petition text making this suggestion. Probably too late for letters to ministers. 100k signers to get it debated.

Edited by ebull

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There's an even easier way. Just let housebuilders know that if they don't build on land within 5 years after pp has been granted then the land will be bought by the government at the price they paid for it and turned into serviced plots.

Edited by Gigantic Purple Slug

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22 minutes ago, ebull said:

This view is slightly different to the enforced one on HPC that existing houses must be available at a crashed price.

Any solution must reduce house prices or it isn't a solution at all.

If prices are too high for people to buy, it doesn't matter how many houses there are. No-one who wants one can get one.  

If prices aren't high, then there isn't a problem, no matter how few houses there are.  Anyone who wants one can get one. 

So prices are the issue. 

Other than that, this is a suggestion that has been made here numerous times before.

I think that, like me, most people here support at least a loosening of planning restrictions.

I am very skeptical that it would work. It definitely is not a magic bullet because, apart from the fact it might have little effect, building homes costs money and takes years. 

There really is a magic bullet, that would absolutely solve the crisis and would also be a massive boost to the economy.

That solution is to tax the value of land instead of taxing income.  Economists have known this for the best part of 2 centuries. 

Edited by BuyToLeech

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Nothing to do with supply... check Ireland's oversupply of housing yet fast increasing prices (before the banks wobbled, that is). This is a mirage. What matters is the banks ie. how much cash they are allowed to create in the form of mortgages... credit flow. Pretty basic stuff. 

Edited by gruffydd

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23 minutes ago, ebull said:

There is a simple easy solution to the housing crisis which the government could implement without it even costing them much if anything.
Allow permitted development at a rate of say one 250m2 house per acre on all land in the UK except national parks and a few green belt type reserved green spaces...

What do you do after permissions are granted, land prices rise, but the building rate stays the same because owners aren't idiots about competing away their profit windfalls given fixed land supply and they own it?

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2 minutes ago, BuyToLeech said:

Any solution must reduce house prices.  If prices are too high for people to buy, it doesn't matter how many there are. No-one who wants one can get one.

If prices aren't too high, then there isn't a problem no matter how few houses there are.  Anyone who wants one can get one. 

So prices are the issue. 

Other than that, this is a suggestion that has been made numerous times before. Most people, I think, support at least a loosening of planning restrictions.

Personally, I am very skeptical that it would work. It's not a magic bullet because building homes costs money and takes years. 

There is a magic bullet, that would absolutely solve the crisis and would also be a massive boost to the economy. That solution is to tax the value of land instead of taxing income. 

I disagree.

Prices are AN issue and too high almost everywhere [completely agree].

At present there are also too few houses in many locations. Hence all the beds in sheds, many units in old victorian stock that used to be just one etc etc. Existing housing stock and infrastructure is overused. In some places it's at breaking point.

This is linked to the countries choice on immigration. Sure, changing that would change demand but peronally I dont hugely disagree with allowing lots of folk in. I do disagree with not upgrading infrastructure and housing to be enough for all old and new residents.

Immigration is linked to choice of benefits system and low pay workers. Pay a load of indigenous folk to do nowt but watch TV and be antisocial to all who come across them whilst needing lots of immigrants to clean and wipe arses of the aging population. I have less enthusiasm for that but banning the immigrants would IMO not improve matters.

Building a house on agricultural land would cost around 60k for a basic 100m2 building, 120k would cover 250 m2 or maybe 150+ to make higher ceilings some architectural features etc. Factory kit houses from scandavia anyone? The difference with current prices is significant and at present houses without a possibility of asbo-neighbours carry a premium of at least 200-400k IME so the price difference is then enormous.

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27 minutes ago, Gigantic Purple Slug said:

There's an even easier way. Just let housebuilders know that if they don't build on land within 5 years after pp has been granted then the land will be bought by the government at the price they paid for it and turned into serviced plots.

This.

But the land put up for auction.

5 years. Use it or lose it,

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7 minutes ago, gruffydd said:

Nothing to do with supply... check Ireland's oversupply of housing yet fast increasing prices (before the banks wobbled, that is). This is a mirage. What matters is the banks ie. how much cash they are allowed to create in the form of mortgages... credit flow. Pretty basic stuff. 

I realise that accepted wisdom on here is that anyone who argues for more supply is denying that prices are too high.

My opinion is that current prices are 30-70% too high depending on location.

Accepted wisdom here in 2006 was that the government could not prevent a crash. Yet they did and that HPC-mantra seems to have been dropped. Personally I think the market can stay irrational longer than I can stay solvent and that the government will always be able to do irrational things.

My opinion is also that there is a need for more housing.

My observation is that the government COULD do that by derestricted planning.

[without it costing money].

The fact I think there is a need for more supply does not logically imply that I think house prices are correct-OK-etc. That  conclusion-connection is one I often read here and has IMO no logical validity.

In any case for me it does not apply.

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41 minutes ago, Gigantic Purple Slug said:

There's an even easier way. Just let housebuilders know that if they don't build on land within 5 years after pp has been granted then the land will be bought by the government at the price they paid for it and turned into serviced plots.

Huge risk of moral hazard here. Landowner gets planning permission, sets up a housebuilding company which buys the land off him for 18 quadrillion pounds, 5 years later government coughs up.

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25 minutes ago, guest_northshore said:

What do you do after permissions are granted, land prices rise, but the building rate stays the same because owners aren't idiots about competing away their profit windfalls given fixed land supply and they own it?

Why would land prices rise? Unless we admit a further 100M folk or more there won't be enough demand for land from people with enough money to build for it to become scarce. Current use is very low.

The arguments here seem to resolve around the current model of allowing Barratt and the like to build their nasty boxes. If you can buy something with a bit of style and character and flash from Ikea or some higher quality version, who on earth would accept the awful crap that current builders turn out?

I give you this as an example. Don't know the numbers but am guessing the house cost is order of 150k. Greedy builder has put two too close together though.

http://www.rightmove.co.uk/property-for-sale/property-51626931.html

www.artichouse.co.uk/technical-info/the-artic-frame-system-/

Edited by ebull

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31 minutes ago, ebull said:

I disagree.

Prices are AN issue and too high almost everywhere [completely agree].

No, prices are the whole issue, that's just how markets work.  

As I said, we could have ten times as many houses and it would make no difference if it doesn't lower prices. People wouldn't be able to afford them and they would stand empty. 

And if prices were low enough, it also doesn't matter how many there are. Anyone living in a shed would be choosing to live in a shed, because they could afford not to if they wanted to.  

That's what cheap and expensive mean.  Cheap means easy to get, expensive means difficult to get. 

Prices might be too high because there are too few of them, I don't think so, but that's a common view even on here. But it's still the price that's the problem. 

So if you build houses, you are doing it in order to lower prices and if you haven't lowered prices then you've achieved nothing.

Edited by BuyToLeech

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Nah. Its not supply and demand. Just dig out some research about the Collapse is House Prices in Ireland after the GFC. It wasn't supply and demand then. It never is. 

Its speculation using easy money from loose credit. 

If it wasn't, your idea will result in even more speculation to drive up prices even higher for these new houses. HPI forever?

Edited by Thorn
Typo

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3 minutes ago, BuyToLeech said:

No, prices are the whole issue, that's just how markets work.  

As I said, we could have ten times as many houses and it would make no difference if it doesn't lower prices. People wouldn't be able to afford them and they would stand empty. 

And if prices were low enough, it also doesn't matter how many there are. Anyone living in a shed would be choosing to live in a shed, because they could afford not to if they wanted to.  

That's what cheap and expensive mean.  Cheap means easy to get, expensive means difficult to get. 

Prices might be too high because there are too few of them, I don't think so, but that's a common view even on here. But it's still the price that's the problem. 

So if you build houses, you are doing it in order to lower prices and if you haven't lowered prices then you've achieved nothing.

If the government controlled prices at say 1000/m2 in all of the South East, what would happen?

I suspect most here have never lived in a place where housing prices are controlled. I have [rent control] and I do not recognise your story about the choices for shed dwellers.

Again, what do you think would happen?

Added to which the subject of this thread was what Hammond COULD do now.

Wave a wand to create low prices whilst selected members of HPC buy is not something for which he has a single magic bullet. .... Ah maybe that's what he meant?

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19 minutes ago, ebull said:

Why would land prices rise? Unless we admit a further 100M folk or more there won't be enough demand for land from people with enough money to build for it to become scarce. Current use is very low.

The arguments here seem to resolve around the current model of allowing Barratt and the like to build their nasty boxes. If you can buy something with a bit of style and character and flash from Ikea or some higher quality version, who on earth would accept the awful crap that current builders turn out?

I give you this as an example. Don't know the numbers but am guessing the house cost is order of 150k. Greedy builder has put two too close together though.

http://www.rightmove.co.uk/property-for-sale/property-51626931.html

www.artichouse.co.uk/technical-info/the-artic-frame-system-/

I mean the prices of the newly permissioned land. Farm land worth about £10k acre, permissioned land maybe £1-2m acre.

Even if Gov eliminated all planning restrictions, you either own a house (land) or you don't. Those that do understand this and never sell at a price lower than those who don't can get your hands on (because they're not making any more land).

Someone could try to catalyse more sales by undercutting at lower profit margins, but they'd be throwing money away as all the others have to do is buy it off them and hold/flip it back at max price to someone else who doesn't own land.

If you mean the Government allowing development on public land that's a different issue.

It's not what housing goes on it, but that any housing can. I agree a lot of the housng stock is terrible.

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11 minutes ago, ebull said:

If the government controlled prices at say 1000/m2 in all of the South East, what would happen?

I suspect most here have never lived in a place where housing prices are controlled. I have [rent control] and I do not recognise your story about the choices for shed dwellers.

Again, what do you think would happen?

Added to which the subject of this thread was what Hammond COULD do now.

Wave a wand to create low prices whilst selected members of HPC buy is not something for which he has a single magic bullet. .... Ah maybe that's what he meant?

If you could buy a house for £100, would you care how many houses there were?

I'm not saying this is realistic, I'm showing that the price is what matters. 

And if a bedsit cost £1M, would it help you to know that there were 5 million of them?

Again, not realistic, but the point is that the price is everything.

So, now being realistic, the question is what should the government do about prices?

I actually think that a building program isn't a terrible idea for a Tory government.  It's consistent with most of their policies, and it might work.

But 'might work' means 'might bring down the price of houses', because that's all that matters.

Price fixing isn't something any Tory government would ever do, it's hard to see how that would work in practice.  Rent fixing also isn't going to be a Tory policy, but that might work.

 

Edited by BuyToLeech

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2 minutes ago, Thorn said:

Nah. Its not supply and demand. Just dig out some research about the Collapse is House Prices in Ireland after the GFC. It wasn't supply and demand then. It never is. 

Its speculation using easy money from loose credit. 

if it wasn't, your idea will result in even more speculation to drive up prices even higher for these new bhouses. HPI forever?

I did NOT say it was a problem about supply and demand. Or say anything about what the problem is.

I said if there were permitted development rights to build on any land then some who are buying now would be able to build at a much lower total cost than current prices.This is a change in the situation not a judgement about what is wrong, what problem should be fixed to do the right thing.

If [I believe likely given the wealth of the non-indebted in the UK] that reduced demand on some other parts of resale market it would cause some reduction in prices. OK that part is supply. But the argument is not based on supply and demand being the problem, the argument is based on prices for existing stock being out of line with build cost especially new-hi-tech build costs.

Reminder that 65% of UK houseowners do not have a mortgage.

How many would be buying [help the kids to buy] existing stock at 300-400k when something with more space, surrounded by own land, own design etc can be had for 200k?

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a rate of say one 250m2 house per acre

Thats too simple, lets say I own a plot of 100 acres do I have to space the houses out one per acre with huge spaces in between that's going to be very inefficient and make lots of land in between wasted and unusable for either houses or agriculture.

Now as an alternative if we allow that landowner to group the 100 houses all in one corner, what's to stop the developer building them and then selling off the remaining 90 acres - and then someone else applies to build 90 houses.

Heres a different approach - split all the available land into blocks and assign every block a code from 1 to 10

Every 5 years you grant the right to build on blocks with one code, they can apply for planning with a virtual guarantee of approval, but they have to complete the build within the 5 years, anything half finished when the time runs out has to be torn down. If nothing gets built then you have 50 years before that block comes around again.

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8 minutes ago, guest_northshore said:

I mean the prices of the newly permissioned land. Farm land worth about £10k acre, permissioned land maybe £1-2m acre.

Even if Gov eliminated all planning restrictions, you either own a house (land) or you don't. Those that do understand this and never sell at a price lower than those who don't can get your hands on (because they're not making any more land).

Someone could try to catalyse more sales by undercutting at lower profit margins, but they'd be throwing money away as all the others have to do is buy it off them and hold/flip it back at max price to someone else who doesn't own land.

If you mean the Government allowing development on public land that's a different issue.

It's not what housing goes on it, but that any housing can. I agree a lot of the housng stock is terrible.

1 acre with permission for 250m2 = 1 or 2 houses only costs more like 300-500k most places.

If all farm land was permissioned [that's what permitted development means - look it up - already established as a rights system for conversion of some existing buildings for example], farm land would not suddenly cosy 400k / acre [until it is scarce or hoarded in which case measures may be required in the future to forcibly release it - dodgy ground of course]

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1 minute ago, ebull said:

1 acre with permission for 250m2 = 1 or 2 houses only costs more like 300-500k most places.

If all farm land was permissioned [that's what permitted development means - look it up - already established as a rights system for conversion of some existing buildings for example], farm land would not suddenly cosy 400k / acre [until it is scarce or hoarded in which case measures may be required in the future to forcibly release it - dodgy ground of course]

True I misread, but that's still from £10k to £300-500k per house plot.

You're missing the point that the limiter is not in permissioning but in land ownership. For your idea to work you need to explain the incentive for an owner of one of these plots to sell it at less than max price.

As I said before, if you mean letting the public self-build on permissioned public plots that's quite different

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4 minutes ago, Habeas Domus said:

a rate of say one 250m2 house per acre

Thats too simple, lets say I own a plot of 100 acres do I have to space the houses out one per acre with huge spaces in between that's going to be very inefficient and make lots of land in between wasted and unusable for either houses or agriculture.

Now as an alternative if we allow that landowner to group the 100 houses all in one corner, what's to stop the developer building them and then selling off the remaining 90 acres - and then someone else applies to build 90 houses.

Heres a different approach - split all the available land into blocks and assign every block a code from 1 to 10

Every 5 years you grant the right to build on blocks with one code, they can apply for planning with a virtual guarantee of approval, but they have to complete the build within the 5 years, anything half finished when the time runs out has to be torn down. If nothing gets built then you have 50 years before that block comes around again.

All systemic adjustments are fine.

But why the concentration by everyone here on having developers building estates?

Much discussed that most [all?] HPCer have [a few x] 100k waiting to move in when the market. Surely you [we] HPCers are exactly the group who would benefit from this using our own money to solve our own housing needs with everything we ever wanted without the need for pervcentage merchants.

My view is that there are many more who would do likewise.

The RM link above, I would buy at 350k if it wasn't so close to the neighbour. In that area something like that without a neighbour and without "issues" - whatever they are [I suspect they mean bc has a problem with it] and surrounded by 1 acre of it's own land is a. rare b. would cost 600k ++ c. could be had for 220k total under my proposed system or 400k with then surrounding 20 acres which is what I would do. OK I admit self interest.

 

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2 minutes ago, guest_northshore said:

True I misread, but that's still from £10k to £300-500k per house plot.

You're missing the point that the limiter is not in permissioning but in land ownership. For your idea to work you need to explain the incentive for an owner of one of these plots to sell it at less than max price.

As I said before, if you mean letting the public self-build on permissioned public plots that's quite different

I mean letting the public [everyone] self-build on farm land. Search permitted development, it's planning jargon and has a legal meaning.

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10 minutes ago, Maynardgravy said:

Why five years? If you bought it to build on it, build on it.

Five years is an ok length of time to get your sh1t together.

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2 minutes ago, ebull said:

I mean letting the public [everyone] self-build on farm land. Search permitted development, it's planning jargon and has a legal meaning.

I understand the term. But assuming someone except the Government owns that farm land, how do they get compensated?

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2 minutes ago, spyguy said:

Five years is an ok length of time to get your sh1t together.

To be honest I'd bite the hand off any government offering to bring that in, but I still think 2 years is plenty enough time to start developing.

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  • 406 Brexit, House prices and Summer 2020

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      • down 5% +
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