The Flat Building Endemic

[munimula]

http://www.bournemouthecho.co.uk/news/late...es_the_dust.php

A LUXURY Poole home worth millions of pounds is being demolished to make way for flats, despite being only 10 years old.

And neighbours now fear the move could spark a flood of new developments in the area.

Building workers are currently dismantling the three-storey house called "Brooklyn" on Bingham Avenue in Lilliput to clear the site for a new apartment block.

A nearby resident commented: "The house was only built in 1997 and now it is being smashed up. It was a lovely house and they are knocking it down. I've never seen anything like it before.

"It must have been worth around £2.5m to £3m."

This isn't the only case in Poole, there is another near us right next to the beach. Pretty much the only thing that gets built now in Bournemouth/Poole area is flats.

It is incredible that the economics make it worth knocking down a million pound house to build flats.

Edited May 2, 2007 by munimula

[BandWagon]

http://www.bournemouthecho.co.uk/news/late...es_the_dust.php

This isn't the only case in Poole, there is another near us right next to the beach. Pretty much the only thing that gets built now in Bournemouth/Poole area is flats.

It is incredible that the economics make it worth knocking down a million pound house to build flats.

Someone want to post that graph showing the ratio of houses to flats built during boom and bust?

When land is cheap developers build houses, when land is expensive they built flats.

The problem with this is that you can convert decent houses into flats, they're far more flexible accommodation, I've yet to see someone convert flats into houses.

Very sad to see how the market has been distorted by this boom, the UK desperately needs good quality 3 and 4 bed homes, not 2 bed rabbit hutches.

[munimula]

Some interesting comments from people;

This one is a beauty!!

Even though I am a home - owner, I am praying for the bank of england to be bold on Thursday, and push up interest rates by as much as possible, in the absence of proper democratic planning, the only way to save our town and it's remaining decent houses, is for a return to a full blown 90's style house price crash - bring it on now!. In the long term we need to seperate interest rates for business and consumer loans, and adjust the consumer loan rate to control consumer led inflation including house price inflation - much of the demand at the moment is speculative, these new flats are being purchased and left empty for investment purposes, after all, who would actually want to live in one!

The problem is that local people, in the main, cannot afford the prices of these new flats (Personally I'd call them rabbit hutches), so they either lie empty for months then local landlords/buy to let people buy them and this is what keeps the prices up in the area.

[Fancypants]

you can sell more mortgages with a bunch of flats than with a house. More fees & commission per sq foot! A greater number of debtors overall, a higher "yield", however you wanna look at it. In a crazy credit bubble world, this is how money is made (if you can't see beyond the end of your revenue stream)

[Bathsheba Everdene]

Just to go back to the initial post for a moment and the comments from local residents, I would take issue with the statement 'It was a lovely house' -- it was both huge and really ugly! It always looked empty when I walked past, so it was probably doomed.

On a wider note, yesterday's Land Registry figures for Poole and Bournemouth show YOY increases of a little over RPI, so there's no current boom in progress. This is borne out by walking around and looking at the For Sale signs, which remain static for years outside the same properties (especially on Sandbanks -- fourth most expensive real estate in the world, yawn).

BE

[munimula]

On a wider note, yesterday's Land Registry figures for Poole and Bournemouth show YOY increases of a little over RPI, so there's no current boom in progress. This is borne out by walking around and looking at the For Sale signs, which remain static for years outside the same properties (especially on Sandbanks -- fourth most expensive real estate in the world, yawn).

BE

Yep, my 'marker' property in Branksome, new house (£799K) has been for sale since I moved down in Aug last year;

http://www.rightmove.co.uk/viewdetails-592...=4&tr_t=buy

There are a lot of houses for sale down here in the premium bracket, hundreds over £750K alone.

So if they aren't selling then why aren't the prices falling and why aren't we hearing about it?

[bomberbrown]

Here's the clue:

Borough of Poole council granted permission for a new development of nine flats on the site last year

I rather suspect that the Council Tax revenue will be far greater and more beneficial (single occupancy/no school children to be taught) on nine Band D flats as opposed to a Band H property with a family of 4 kids.

[AteMoose]

Ahhh, its all because of a change in government policy gardens and houses are now considered brownfield sites... my parents are considering knocking there house down and building flats, it would bring the street down, but a neighbour might do it first, who will do it first?

http://www.uklanddirectory.org.uk/suburban...nfield-site.htm

[munimula]

Here's the clue:

I rather suspect that the Council Tax revenue will be far greater and more beneficial (single occupancy/no school children to be taught) on nine Band D flats as opposed to a Band H property with a family of 4 kids.

Yeah but one comment complains about a school that is now oversubscribed in that area because no extra school provisions have been made whilst population density is increased by building flats (if this is a fair point as I'm sure eastern european immigrants might factor in that problem too)

[munimula]

Ahhh, its all because of a change in government policy gardens and houses are now considered brownfield sites... my parents are considering knocking there house down and building flats, it would bring the street down, but a neighbour might do it first, who will do it first?

http://www.uklanddirectory.org.uk/suburban...nfield-site.htm

From that article;

However, flats in residential areas routinely sell for more than those in less desirable former industrial areas. Therefore, most developers prefer to knock down existing homes and build over them, despite having substantial unused land banks.

George Wimpey admits it already owns 14,169 acres of land that it has not yet built on, with enough space for almost 51,000 homes. It refuses to say how much it would charge for the flats it wants to build in place of the bungalows at Crowthorne.

That's nasty. Another part of the planning laws that is restricting supply of houses.

[MarkG]

Ahhh, its all because of a change in government policy gardens and houses are now considered brownfield sites... my parents are considering knocking there house down and building flats, it would bring the street down, but a neighbour might do it first, who will do it first?

Indeed: it's basically a 'prisoner's dilemna' situation. No-one in an expensive area wants to see a block of flats built and filled up with renters on housing benefit, but everyone will benefit personally from selling their house so someone can build the flats.

So the logical response is to be first to sell before someone else does and the value of your house drops as a result.

[silver surfer]

Given that we've really experienced land price inflation rather than house price inflation, it's no surprise that developers are now increasing housing density.

The problem comes when prices start to fall because almost everyone will always buy the biggest, best property they can possibly afford. If that means a 45 sq m flat then so be it, but when their funds allow them to go further they'll just ignore these recently built micro-apartments.

I saw the same thing in the early 90's, all property prices fell but the tiny little studio flats and one bed rabbit hutches didn't just depreciate, they became absolutely unsaleable as even first time buyers found they could afford something bigger.

[BuyingBear]

Given that we've really experienced land price inflation rather than house price inflation, it's no surprise that developers are now increasing housing density.

Quite, plus the fact the local councils have no backbone, guidance from central government might as well come from the big house builders and their profit objectives (it probably does).

The big builders seriously don't care if they trash an area, and the rural nimbies certainly don't care provided their uneconomic cruddy fields are left alone.

Edited May 2, 2007 by BuyingBear

[BuyingBear]

Indeed: it's basically a 'prisoner's dilemna' situation. No-one in an expensive area wants to see a block of flats built and filled up with renters on housing benefit, but everyone will benefit personally from selling their house so someone can build the flats.

So the logical response is to be first to sell before someone else does and the value of your house drops as a result.

Which is why a decent planning framework would simply say "NO!" to any such plans thus avoiding a moral hazard, if the councils had some balls then there would be no such blight.

Pre-1960's suburbia will eventually be bulldozed and packed with high density flats, the local authorities will approve as they're rather fond of all the juicy council tax. Maybe the rules on the greenbelt will eventually change when this actually starts to direct affect well meaning civil servants that live in such areas that will have to be destroyed under the current set up. The government and the nimbies refuse to release land so unless we start expelling people from the country this sort of destruction is the logical outcome of the current 'have your cake and eat it' rules.

As for 'brownfield' factories and waste dumps, nobody wants to live there, there is no infrastructure or public services, developers recognise that people want to live in existing residential areas so they set about trashing them and cramming in as many flats as possible. 'Brownfield' is now considered to be your neighbours back garden rather than the de-industrialised wasteland on the wrong side of town.

Edited May 2, 2007 by BuyingBear

[BuyingBear]

From that article;

That's nasty. Another part of the planning laws that is restricting supply of houses.

That's central planning for you.

In the Soviet union there was a factory that produced corrugated roofing, they were given production targets as set out in the five year plan, failure to hit the targets would mean a visit to the gulag, capitalist systems could only dream of such 'incentivized' workers. Anyway, the production targets were for X tons of production per week, the factory soon hit these targets and were proud, the only problem was the sheets of metal were so thick and heavy it caused the buildings to collapse, but they had hit their targets in terms of tonnage.

The central planners soon recognised the problem and decided to change the production targets to X square meters so the factory couldn't game the system by producing thick panels, but in order to hit the new targets the factory decided to produce the sheet metal as thin as possible so they could soon hit their targets in terms of surface area, the metal sheets were so thin they would be dented by rain and rust away in a matter of weeks, but the factory had hit its targets.

Anyway, central planning f***s the consumer, whether it be some hapless soviet factory, the NHS, food rationing or a crooked housing market.

[MarkG]

Anyway, central planning f***s the consumer, whether it be some hapless soviet factory, the NHS, food rationing or a crooked housing market.

On that subject, I was reading an interesting book at the weekend called 'Wasting Police time', which has an awful lot to say about the way central planning and performance targets have destroyed the police in this country, encouraging them to arrest people on suspicion of any minor crime so they can 'solve' it and increase their cleanup rate even though it means they no longer have time to deal with the real crimes that people actually care about. The cop who wrote it said he spends most of his time either doing paperwork or being called out to disputes between chavs which would have been ignored or dealt with quickly a couple of decades ago but now take days of his time that could be spent patrolling the streets and catching or discouraging real criminals.

[Leonard Hatred]

As for 'brownfield' factories and waste dumps, nobody wants to live there, there is no infrastructure or public services, developers recognise that people want to live in existing residential areas so they set about trashing them and cramming in as many flats as possible. 'Brownfield' is now considered to be your neighbours back garden rather than the de-industrialised wasteland on the wrong side of town.

There's a former factory site near me that is slap bang next to a major dual carriageway. The land has been empty for about 5 years and I find it amazing that there aren't houses on it now (it's already next to a massive housing estate). Meanwhile, 1 mile down the same road, planning has just been granted to build on green belt. Lunacy! (although both sites are actually in different boroughs, which might explain it).

[chichi]

Near us someone got a former planning dept worker to help prevent a house being turned into 9 flats - they've been told that 6 flats will be allowed if they're luxury ...

It does seem really mad when there are gluts of flats in the big cities....