Jump to content
House Price Crash Forum
It is different this time

For Sale: Too Many Flats, Not Enough Houses

Recommended Posts

http://www.telegraph.co.uk/news/main.jhtml...9/nhouses29.xml

For sale: too many flats, not enough houses

By Philip Aldrick and Harry Wallop

Last Updated: 1:11am BST 29/05/2007

Your view: Are we building enough new houses to meet demand?

An acute shortage of houses is driving the boom in the property market while at the same time developers are being forced to build a "tidal wave" of new flats which they are struggling to sell.

John Prescott's policy is blamed for the shortage of houses

The latest Government figures show that the price of a family house has risen at eight times the rate of a new flat since 2000.

Last night building experts and the Conservatives blamed John Prescott for a policy that has made it increasingly hard for families to move up from a flat to a house.

The boom of recent years has disguised a discrepancy between the soaring prices for new houses compared to a relatively sluggish performance for new flats. A major reason for the gap is developers being encouraged to build apartments at the expense of family homes.

Since 2000, when the Deputy Prime Minister introduced controversial planning regulations, the number of detached, semi-detached or terrace homes being built has fallen, with 21,000 fewer built last year than in 2000, according to the National House Building Council.

This shortage has caused the cost of a detached house to double to £313,000 while the price of a new flat has climbed just 11 per cent to £188,000, according to statistics from the Land Registry.

Roger Humber, of the House Builders Association, said: "When politicians try to rig the market they eventually corrupt the market. It's the outward workings of Prescottian economics, as I call it."

He said that in Manchester alone there were 20,000 flats awaiting planning permission against "just a handful" of new houses. "It's across the country - a tidal wave of new flats waiting to come on to the system. They can never possibly hope to sell them all

Michael Gove, the Tory housing spokesman, said yesterday: "Government housing rules have led to a 'pile 'em high' approach to development, which has seen us getting flats rather than family homes. We know the primary demand is for family houses but because of the planning system there is a lack of supply."

Builders say their hands are tied. They are forced to use ever smaller plots of land and encouraged to build flats over houses.

John Slaughter, of the Home Builders Federation, another industry group, said: "There is clear demand for more family housing and our industry would like to see an environment where it was possible to supply that."

If the trend continued large families would find it increasingly difficult to find homes with enough space to live in, he added.

Mr Humber said that it was becoming impossible for couples with a young family to trade up from a flat to a three-bedroom house. "How do you make that price jump? It's becoming harder and harder." Experts blame the problem on Mr Prescott's so-called PPG3 guidelines of 2000 which forced a greater number of homes on to each plot of land. The policy was designed to meet the need for new homes without building on green belt.

Mr Prescott's policy has been, superficially, a success, with the number of homes built per hectare up from an average of 25 in 2000 to 41 last year. Equally the number of flats being built each year is up from 23,626 to 56,823.

However, the target has only been hit by builders switching their resources from houses to flats. There are now a third fewer houses being built each year than in 2000.

The situation has got worse because of the rise of buy-to-let landlords looking to invest in small properties.

Mr Gove said: "It's not for me or for the Government to prescribe whether people should live in flats or houses, but the rules as they stand work against houses."

Latest projections show that the number of households in England will grow by 209,000 a year until to 2026. The Government has a target of building just 200,000 new homes a year - a target it has yet to hit.

Builders say the only solution is to allow them to access to more land. John Stewart, of the Home Builders Federation, said: "Either we push up densities even more or we push up the amount of land made available."

The Department of Communities and Local Government insisted that the latest building regulations, introduced in April and which replace PPG3, should make it easier for councils to grant permission to build family houses.

"It is a national policy that puts the emphasis on councils doing a thorough assessment on what the local community needs and what the right mix of local homes is needed," a spokesman said.

I know Cristiano Ronaldo & David Beckham can snap up some but Who is going to buy 20,000 flats in Manchester?

Thanks to Deputy Prime Minister's controversial planning regulations, the number of detached, semi-detached or terrace homes being built has fallen & flats have been snapped up by the BTL speculators. The rest can just go to hell! Well done Labour, proud of your mess?

Share this post


Link to post
Share on other sites

I take it they are implying that houses are always larger than flats? They don't even measure typical sizes. Many terraces are very very pokey indeed, and remember the stairs are not usable living space unless you don't mind them being used to store cups and magazines for people to trip over and break their neck. I'd much prefer a roomy flat than a pokey terrace, especially if I had difficulty with stairs.

Share this post


Link to post
Share on other sites

True, I think builders should be obliged to build flats/houses that are actually fit for people to live in, not pokey plasterboard constructions designed soley to maximise profits.

Share this post


Link to post
Share on other sites

Developers build flats because there is higher profit margin in them than houses, this has very little to do with the Governement, they're now blaming everyone but themselves for the glut of flats on the market. Market forces are now coming into play, supply and demand old sport, notice how they weren't whining two/three years ago when any old shoe box with a plastic kitchen were going like hot cakes.

Edited by Jimmy2Times

Share this post


Link to post
Share on other sites
This shortage has caused the cost of a detached house to double to £313,000 while the price of a new flat has climbed just 11 per cent to £188,000, according to statistics from the Land Registry.

That would mean that flats were more expensive than detached houses 7 years ago. Sounds like the article is based on flawed figures to me.

Share this post


Link to post
Share on other sites

UK housing market/economy = one big ****** up from start to finish for the last 5 years.

The flat market was never a source of homes, it was a mechanism for creating a market for BTL and loans, a speculative bubble carefully nutured by a whole raft of vested interests.

Share this post


Link to post
Share on other sites
ah, but in England, flats lack "snob appeal", and hence they may see more demand when they are scarce

Actually, I think many houses may suffer from the "curse of the suburbs" in years to come.

But few have even started to think about this

See: http://www.greenenergyinvestors.com/index.php?showtopic=1024

I live in a small house in the suburbs. However, the garden covers twice the area of the house, and that makes a difference. My daughter loves it, I grow stuff to make it look nice and I have a shed, filled with all number of bikes, tricycles, barbecues etc. This is what is so nice about a house and what you can never get from a flat.

Share this post


Link to post
Share on other sites
I live in a small house in the suburbs. However, the garden covers twice the area of the house, and that makes a difference. My daughter loves it, I grow stuff to make it look nice and I have a shed, filled with all number of bikes, tricycles, barbecues etc. This is what is so nice about a house and what you can never get from a flat.

Quality of life has to be one of the most important things over and above owning just for the sake of it. When my little boy was watching the grouse in the back garden and chasing rabbits down the path last week it just confirmed to me that I am making the correct decision staying where I am for the moment.

Share this post


Link to post
Share on other sites
I take it they are implying that houses are always larger than flats? They don't even measure typical sizes. Many terraces are very very pokey indeed, and remember the stairs are not usable living space unless you don't mind them being used to store cups and magazines for people to trip over and break their neck. I'd much prefer a roomy flat than a pokey terrace, especially if I had difficulty with stairs.

Good point,

I have friends who bought a new build house a year or so ago.

It is "four bedroom" but seriously even the "Master bedroom" only really big enough for a double bed and minimal furniture and its a good job they are not planning on putting more than one sofa in the sitting room or they would not be able to open the door (but this place does have a "dining room". That and all the houses are far too close together and all seem to be overlooking each other really badly.

Share this post


Link to post
Share on other sites
I live in a small house in the suburbs. However, the garden covers twice the area of the house, and that makes a difference. My daughter loves it, I grow stuff to make it look nice and I have a shed, filled with all number of bikes, tricycles, barbecues etc. This is what is so nice about a house and what you can never get from a flat.

Not the garden maybe, but you can have a nicely sized balcony with a flat and an underground garage or cellar for storage which is much more secure than a shed. The problem is that the comparison is often nice house vs badly designed, overpriced flat. It would be possible to build well designed, roomy flats if builders wanted to.

Share this post


Link to post
Share on other sites
That would mean that flats were more expensive than detached houses 7 years ago. Sounds like the article is based on flawed figures to me.

Good spot - this would make flats worth £169k 7 years ago - very unlikely. Probably just a typo.

Edited by Ah-so

Share this post


Link to post
Share on other sites

i wouldn't buy one of these new build flats - even if the market collapsed

i've got a feeling that they'll be tearing them down as their price collapses and they turn into dangerous slums

same happened to flats they built in the 60's and 70's esp in northern towns...

Share this post


Link to post
Share on other sites

Some very confused thinking here.

Here are the facts:

1. Too many flats being built ie oversupply. This is confirmed by stagnant market for flats (my developer clients confirm that the market for flats in Birmingham, for example, is dead).

2. Owners of flats cannot afford to trade up because the price differential between a flat and a three bed house is too great.

The result must surely be that the bottom falls out of the market ie the price of flats falls fast. This makes the differential between a flat and a three bed house even larger which means there are no buyers for 3-bed houses. The price of 3-bed houses must also fall fast therefore, followed by 4-beds etc etc.

The HPC is in Mexican Wave mode IMHO.

Ready to stand on your feet and wave your arms?

Share this post


Link to post
Share on other sites
Guest grumpy-old-man
Some very confused thinking here.

Here are the facts:

1. Too many flats being built ie oversupply. This is confirmed by stagnant market for flats (my developer clients confirm that the market for flats in Birmingham, for example, is dead).

2. Owners of flats cannot afford to trade up because the price differential between a flat and a three bed house is too great.

The result must surely be that the bottom falls out of the market ie the price of flats falls fast. This makes the differential between a flat and a three bed house even larger which means there are no buyers for 3-bed houses. The price of 3-bed houses must also fall fast therefore, followed by 4-beds etc etc.

The HPC is in Mexican Wave mode IMHO.

Ready to stand on your feet and wave your arms?

:D

it's all one big knock-on effect really isn't it. In a country that's main/only (oh sorry I am forgetting about our knowledge/service sector as well :blink: ) economic output is hpi & debt, everything will topple surely ? :lol:

Share this post


Link to post
Share on other sites
:D

it's all one big knock-on effect really isn't it. In a country that's main/only (oh sorry I am forgetting about our knowledge/service sector as well :blink: ) economic output is hpi & debt, everything will topple surely ? :lol:

Yes, on reflection a 'domino' analogy would have been better. With the Mexican wave you sit down again. With the HPC people are going to fall flat on their faces.

Share this post


Link to post
Share on other sites
Developers build flats because there is higher profit margin in them than houses, this has very little to do with the Governement, they're now blaming everyone but themselves for the glut of flats on the market. Market forces are now coming into play, supply and demand old sport, notice how they weren't whining two/three years ago when any old shoe box with a plastic kitchen were going like hot cakes.

there are high costs when building high rise flats, or converting warehouses. Building a traditional house is cheaper than a modern block of flats

Share this post


Link to post
Share on other sites
Guest d23
Now I'm confused.

Why does every flat owner want to "trade up" to a house? What is better about a house, if you don't like gardens?

not many people 'don't like gardens'

I've lived in houses and I've lived in flats and always preferred to live in a house tbh; of course it depends on the individual house and flat and I'd prefer to live in a spacious garden flat or one with a roof terrace than a super cramped terrace.

Share this post


Link to post
Share on other sites
Guest d23
there are high costs when building high rise flats, or converting warehouses. Building a traditional house is cheaper than a modern block of flats

not sure thats the case when you factor in land costs

Share this post


Link to post
Share on other sites
Now I'm confused.

Why does every flat owner want to "trade up" to a house? What is better about a house, if you don't like gardens?

Less noise from neighbours (especially in a fully detached house).

No extortionate "service charges".

Less crowded.

Less parking problems.

Share this post


Link to post
Share on other sites
I live in a small house in the suburbs. However, the garden covers twice the area of the house, and that makes a difference. My daughter loves it, I grow stuff to make it look nice and I have a shed, filled with all number of bikes, tricycles, barbecues etc. This is what is so nice about a house and what you can never get from a flat.

I agree also of course is the number and type of neighbours you get. In a flat you can have up 6 properties adjoining yours as I know from experience you only need one problem one to make your life a misery and this is more likely if they are tenants on housing benefits (not true for all housing benefit recipents but it is for a few). In a terraced house you only have 2 neighbours in a semi you get one. This obviously means the chance of problem neighbours is a lot lower and also having a garden is wonderful.

Share this post


Link to post
Share on other sites
Guest Shedfish

yet another set of 36 flats has appeared right in the middle of Stafford -

http://www.rightmove.co.uk/viewdetails-741...17&tr_t=buy

there's a pub next door, another pub that's actually part of the building, and behind them is a nightclub, taxi rank, and all the kebab / chip shops. there appears to be no parking. i can't imagine why anyone would want to live there. you can get a really nice cottage out in the sticks, or a big terrace in town for the same price

i drove past them last night, not a single light...

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 354 The Prime Minister stated that there were three Brexit options available to the UK:

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.