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munimula

Land Cost 30%-40% Of Property Value

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Interesting to see a figure for this.

High land cost largely due to ridiculous restrictions on land available for building.

From the Policy Exchange report;

The high price of land available for housing is a consequence

of its restricted supply. The demand for housing

has increased because of a growing population, an

increased number of households, longer life expectancy

and, not least, increasing incomes. So, as the supply of

land is constrained, the increased demand is reflected in

higher and higher prices both for housing and for land

which can be used for housing. 60 years ago the price of

land for housing was a little more than the price of land

for agriculture because it was necessary to give some

incentive to the farmer or land owner to sell. Now the

price of agricultural land in southern England is about

£5,000 per hectare while the price of land with planning

permission for residential development is about £2

million per hectare. At the minimum density now

permitted of 30 dwellings per hectare each house is, on

average, some £65,000 higher in price than they would be

if there were no constraints. Land costs therefore account

for between 30 and 40 per cent of the £200,000 average

price of a new semi-detached or terraced house in the

South East.15

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Interesting to see a figure for this.

High land cost largely due to ridiculous restrictions on land available for building.

From the Policy Exchange report;

taking into account that 30-40% is locked into the price for the land when buying a house... that means a flat is outrageously overpriced and a complete rip off as your not even buying the land ?

stop buying flats and DEMAND housing !!

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taking into account that 30-40% is locked into the price for the land when buying a house... that means a flat is outrageously overpriced and a complete rip off as your not even buying the land ?

stop buying flats and DEMAND housing !!

the land the flat is built on cost x so this is also in the price of the flat.

Edited by munimula

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At the minimum density now

permitted of 30 dwellings per hectare each house is, on

average, some £65,000 higher in price than they would be

if there were no constraints.

I have to say I don't understand why they have chosen the figure of minimum (not maximum) density, this is the lowest number of houses in the allotted area allowed, this is certainly not 200,000 house teritory. I think in towns they would be looking at a minimum of more like 40 to 50 houses per hectare (a hectare is pretty big, about 2 and a half football pitches). I suspect this will mess up their statistics somewhat. The cost of navigating the red tape to obtain planning permission is probably a reasonable cut of this. I suspect land is about a quarter of the price, building materials an eighth and the rest goes to builders/developers.

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If i had time i could give you a break down of what it cost to build a 3 or 4 bed house you would not f*** believe it :o

sorry time to go to bed

plumbing tommorow :lol:

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the land the flat is built on cost x so this is also in the price of the flat.

Not necessarily. Most apartments in modern developments don't include land. That's owned by the freeholder who charges ground rent on top of the service charge which is for upkeep and insurance of the building.

Also, I'd argue that land prices are more than 30-40% of the value of a property... When I looked at self-building a while ago I worked out that I could build a really decent house for £48K but the cheapest suitable peice of land was £85K! My entire budget was £85K!!

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House prices in my street are £500K, but rebuild cost for insurance is £150K.

Rebuild includes cost of clearing the site and making adjacent properties safe.

Newbuild would be cheaper?

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Has anyone got access to graphs/stats showing historical residential land prices? I can't seem to find anything concrete on the web.

I'm pretty sure they follow the house price boom/busts in the past...

Yes, there is a graph in this report.

http://www.policyexchange.org.uk/Publications.aspx?id=160

Before the 60's land with planning permission was almost the same cost as agricultural land.

Hard to believe now. All due to planning and building constraints.

Edited by munimula

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Before the 60's land with planning permission was almost the same cost as agricultural land.

Hard to believe now. All due to planning and building constraints. [munimula]

The relative value of agricultural land has also fallen due to diminishing returns.

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  • 302 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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