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Saving For a Space Ship

Call to stop landowners making huge profits from speculation

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Call to stop landowners making huge profits from speculation

Thinktank identifies issue as the driving force behind the UK’s broken housing market

https://www.theguardian.com/business/2018/aug/28/call-to-stop-landowners-making-huge-profits-from-speculation

Quote

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The sweeping reforms would mean national and local government organisations would benefit from the extra value generated by planning decisions, which could be used for local infrastructure or affordable housing, rather than landowners accruing massive returns from the state approving changes in the use of land.

Using the example of a hectare of agricultural land in Oxfordshire that would typically be worth about £25,000, the IPPR said it could skyrocket in value by more than 200 times on approval for residential development to be worth about £5.6m. While the landowner stands to benefit from approval, the increase drives up the cost of building homes.

Two years ago on average the price of land had risen to more than 70% of the price paid for a house, which the IPPR said could rise to about 83% over the next two decades given current trends in the housing market. Options to remedy the problem could include councils buying land and selling at higher prices to developers, or entering into partnerships with landowners to share the proceeds of the sale.

About half of net wealth in Britain is tied in up in land, having risen by more than 500% in the past two decades to stand at £5tn. Although the value of property built on land across the country has also risen, it has increased at a much slower rate, of around 219%.

According to a 2010 report for Country Life, a third of Britain’s land still belongs to the aristocracy, while some of the oldest families in the country have held on to their land for several centuries. The IPPR said the top 10% own property wealth averaging £420,000 in value, compared with the bottom 30% who own no net property wealth at all.

Murphy said: “Wealth inequality, a poorly functioning housing market, an economy focused on unproductive investment and macroeconomic instability are all negative consequences of our current speculative land market.”..

 

Edited by Saving For a Space Ship

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The government should setup a revolutionary new SCHEME supported by government funds (aka magical DEBTmoney taxed up from the unborn of the plebs) to encourage landowners to stop speculating on the value of land by BUYING the land up at above market rates then GIVING it back to them. 

This will increase productivity among the plebs as they see how hard work pays if you can accumulate a Shtload of land somehow 

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Well, finally.

Possibly the first idea in over a decade of following this problem that could be part of the solution.

The idea has probably been around for longer than a decade though. I wonder why the Tories are suddenly considering this.

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10 minutes ago, pig said:

Well, finally.

Possibly the first idea in over a decade of following this problem that could be part of the solution.

The idea has probably been around for longer than a decade though. I wonder why the Tories are suddenly considering this.

Demographics are not helping the Tories so if they don't do something pretty quickly they are finished; that could be the reason.

Edited by dougless

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But how would politicians and their friends get and stay rich if they can't exploit the current situation? They'd actually have to do some proper work.

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5 minutes ago, dougless said:

Demographics are not helping the Tories so if they don't do something pretty quickly they are finished; that could be the reason.

 

2 minutes ago, fru-gal said:

But how would politicians and their friends get and stay rich if they can't exploit the current situation? They'd actually have to do some proper work.

Maybe also the U.K. is so screwed the government is looking at planning gain as a source of income ?

I actually think there is a credible rationale to it as ultimately localities are made and sustained by local people.

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Didnt the Gov implement new rules to stop land banking 2 years back . Well a large plot in Guildford that was prepared for building is  still undeveloped 10years on without a hint of work.

Pathetic governemnt cant be bothered to implement or enforce rules

 

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20 minutes ago, pig said:

 

Maybe also the U.K. is so screwed the government is looking at planning gain as a source of income ?

I actually think there is a credible rationale to it as ultimately localities are made and sustained by local people.

Eventually for sure but this Government will fight this tooth and nail.

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1 hour ago, pig said:

 

I actually think there is a credible rationale to it as ultimately localities are made and sustained by local people.

The very people the planning system denies the right to build.

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Same principle applies to land and property value growth arising from infrastructure investment paid for by the taxpayer...as discussed I am sure many times on this website - value capture...

https://en.wikipedia.org/wiki/Value_capture

As for whether we will see real change - I think turkeys voting for Christmas comes to mind.

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6 hours ago, Saving For a Space Ship said:

Thinktank identifies issue as the driving force behind the UK’s broken housing market

How many millions of taxpayer money did they suckle on, just to miss the issue for years then?

The issues are

1] The very existence of planning permission

2] The vast oversupply of credit

 

Addressing either one of these may in fact solve the other. If the disgusting evil which is planning permission is abolished, it may collapse house and land prices, which will cause margin calls in the credit market and a subsequent freeze.

If the governbank stops printing money, then credit will seize, house prices will collapse and land and housing will become much more affordable.

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I would have thought it was absolutely self evident that it's totally wrong for landowners to take huge financial benefits of re-zoning. It's been said plenty of times before on here.

Compensate land owners by compulsory purchase at a higher rate for the current value, say +20%, then grant the planning permissions and either contract a developer to build or sell the land with a covenant preventing it being "banked"

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On 28/08/2018 at 14:55, Locke said:

If the disgusting evil which is planning permission is abolished, it may collapse house and land prices, which will cause margin calls in the credit market and a subsequent freeze.

If planning permission is abolished we will end up with awful urban sprawl and other associated problems, then the developers creating the issues will leave the state to build missing infrastructure from the public purse - no thanks. 

 

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6 hours ago, disenfranchised said:

If planning permission is abolished we will end up with awful urban sprawl and other associated problems, then the developers creating the issues will leave the state to build missing infrastructure from the public purse - no thanks. 

 

You think public infrastructure should be be built by anything other than public money, why?

This infrastructure, is it used by the houses themselves or by people? all other things being equal do people who are inadequately housed use less infrastructure?

Urban sprawl? decently sized houses on decently sized plots is what I call it. The average American enjoys a quality of housing that in this country is the preserve of millionaires. Bring it on. Unless, that is, there is a large demographic in this country who deserve to be forced to live in conditions that the great and good of this country wouldn't tolerate for a second - 'the plebs must squeeze together so Rupert and Mercedes have room to ride their horses!'.

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Two years ago on average the price of land had risen to more than 70% of the price paid for a house, which the IPPR said could rise to about 83% over the next two decades given current trends in the housing market.

 

Ahaaa! What a staggering number. Finally it is being acknowledged. So it turns out Fred Harrison, Ricardo, Adam Smith, Henry George were right were they? Who'd have thought.

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15 hours ago, disenfranchised said:

I would have thought it was absolutely self evident that it's totally wrong for landowners to take huge financial benefits of re-zoning. It's been said plenty of times before on here.

Compensate land owners by compulsory purchase at a higher rate for the current value, say +20%, then grant the planning permissions and either contract a developer to build or sell the land with a covenant preventing it being "banked"

If you think that value is objective, then you fundamentally do not understand reality.

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15 hours ago, disenfranchised said:

If planning permission is abolished we will end up with awful urban sprawl and other associated problems, then the developers creating the issues will leave the state to build missing infrastructure from the public purse - no thanks. 

 

Who would buy, let alone live in, a house with no infrastructure? Where's the profit in making such a thing?

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  • 238 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% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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