Saturday, June 18, 2011

Another one for you-know-who

Govt Calls For Self-Build Housing Boom

Mortgage providers should lend more money to people who want to build their own homes and spark a "self-build revolution", the Government says. Housing minister Grant Shapps says he also wants to change the image of self-building as the preserve of the country rich. Around 15,000 self-build homes are constructed in Britain each year - but the industry in the UK is still one of the smallest in Europe. The National Self-Build Association (NaSBA) says it costs around £150,000 to self-build an average four-bedroom house. It is probably worth £250,000 as soon as it's finished. But some financial experts remain unconvinced. "There's no way you can go to places like London or Surrey and build an affordable home if you can't afford the land in the first place, and this will not change anything."

Posted by drewster @ 11:15 AM (1914 views)
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22 thoughts on “Another one for you-know-who

  • But, where…..?

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  • Just make more small plots of land available for self builders and small developers.

    Let’s not forget that the 150-250k build cost goes straight into the local economy.
    Far better that than the money going straight to the banks in the form of a huge mortgage for an existing house.

    This country really could build it’s way out of recession. We need more houses and providing at least half get built in small scale developments it will be very good for all local economies.

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  • @str 2007

    Actually a lot of the build cost gets sent back to Poland, Romania etc. Builders large and small increasingly prefer cheap, foreign labour they can pay sub-minimum wages to – in cash.

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  • “This country really could build it’s way out of recession”

    Absolutely. Self build gives ordinary people the chance to have a better home than they might otherwise have aspired to.

    The avenue that our Grant should explore is to make special concessions for self build that will free up land for the purpose.

    Local town and parish councils should be allowed to allocate land for the purpose, conditional upon it only being used for self build, and only by people who have been resident in the community for five years or more. In return, those benefiting from the concession should be prevented from selling or letting the property for five years after completion.

    Local councils should also be able to force the landowner to sell the land they allocate at a low capped price (perhaps agricultural value + 100%) – but only if the landowner owns 50 acres or more (so no forced garden-grabbing).

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  • PS – selling the property (either built or part finished) to another qualifying member of the same community should be permissable within the five year period.

    – Landowners should have an incentive to jump before they are pushed!

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  • UT
    I’ve moved back to where I grew up, but have only been here just over 2 years, does that mean I don’t qualify ?

    Also I think I would like the caveat in there that you can sub the work out and not quite literally self build. Afterall taking all those productive people out of the workplace to build their tax free dream may do more harm than good.

    All in all though I really can’t see why they weren’t onto this sooner, it doesn’t exclude any community and helps probably the hardest hit sector of all – construction.

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  • UT
    And only land owners with over 50 acres to avoid garden grabbing.

    LOL – your garden a mere 49.5 acres by chance ?

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  • And in addition to the ‘self build’ thing. How does it work with regardto borrowing if you do stop work to self build ?

    I presume they give you an 18 month window of something with a writtn agreement from your employer ?

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  • “I’ve moved back to where I grew up, but have only been here just over 2 years, does that mean I don’t qualify”

    With rules like this, there needs to be an appeals process – clearly you are not be parachuting yourself into the community to take advantage of a scheme, or carpet-bagging; so yes, you would qualify.

    “Also I think I would like the caveat in there that you can sub the work out and not quite literally self build.”

    There are rules and principles regarding the exact definition of what constitutes self build. I don’t think it would be acceptable for twenty people to secure plots, and then step back and ask Barratts to do the honours. However, it is normal to engage specialist tradesmen to undertake bricklaying, carpentry, electrics etc.

    “How does it work with regard to borrowing if you do stop work to self build ?”

    It depends on what you do for a living, the attitude of your employer and your credit status. I think most people keep their day jobs, and visit site every morning, evening and weekend..

    “your garden a mere 49.5 acres by chance”

    No, I personally own three acres of brownfield industrial land, and a tiny scrap of garden.

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  • Rules rules rules. The 5+5 year residence requirement will make people stay in one town even when there are better job opportunities in other towns. People will commute longer and further rather than give up their place in the queue; and they won’t be able to sell up and move even when there might be good reasons to do so. Labour mobility is hampered, economic efficiency falls.

    Then there are the edge cases – husband dies, wife is left with a mortgage she can’t afford, but she can’t sell the house until the 5 years are up. Yes you can make exceptions, but that’s just adding even more rules.

    Besides, is there even a moral argument that people have a right to own a piece of land after X years residence in the local area? How does the rule apply if I live in Westminster for 5 years, do I get to build a house on Hyde Park?

    Full LVT takes land price out of the equation. Beyond that, whether it’s self-build or Redrow etc is a local planning matter. As str2007 points out, most “self-builds” will be done by contractors anyway.

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  • Drewster,

    The five year rules are to stop the concession being abused. As I said in post #3, the house can be sold to another qualifying member of the same community within the five year period.

    Theorising about LVT is a waste of time because it is too radical a reform to ever be seriosuly considered, let alone enacted; moreover it doesn’t bear close scrutiny.

    As I’ve explained many times before, the reasons why simple tax reforms – like merging NI & income tax – don’t happen, is because it is hard to enact without creating a few winners and losers in the process. And the winners will always be ungrateful, while the losers moan like hell.

    Envisaging wholesale tax reform is therefore pie in the sky – something that will never happen. – Move on..

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  • Ok, points taken, but how do you answer the London question? Does 5 years in Kensington get me a flat at One Hyde Park?

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  • “Does 5 years in Kensington get me a flat at One Hyde Park?”

    For a self build project to be viable, there has to be a supply of land in the locality. Urban areas such as Kensington would be considered fully developed.

    However it is entirely possible for those who are excluded from such a concession for that reason; to be given the chance to participate in the creation of a number of entirely new self built communities, on disused army barracks or airfields.

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  • mark wadsworth says:

    “[LVT] is too radical a reform to ever be seriously considered, let alone enacted; moreover it doesn’t bear close scrutiny.”

    Well, it does bear very close scrutiny, but how about, as a modest start increasing the number of council tax bands from 8 to 26? Or getting rid of bands as a concept and having an annual charge that is expressed as a % of the value of each home – like in Northern Ireland (where the annual rate is 0.7%), i.e. an infinite number of bands? How about adding the TV licence onto Council Tax bills? How about scrapping IHT and SDLT and increasing Council Tax by a quarter to cover it?

    Why is SDLT acceptable but not LVT? SDLT = bad tax, LVT = good tax.

    PS, what about Business Rates in the whole of the UK – we’ve always had this and it work just fine in practice.

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  • But UT, even undeveloped land is worth a lot more in some areas than others. If I spend 5 years renting in Kensington (or Peckham), am I awarded a self-build plot of land in Surrey or on the Western Isles? Or could I get a plot in the Cotswolds, or by the sea, and use it as a weekend / holiday home?

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  • Drewster,

    If self build new communities were over-subscribed due to their being in an attractive area, there would need to be either a points system or a ballot (or a combination of the two) to determine who would be allowed to build them.

    A points system could easily take account of the applicant’s proximity to the development.

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  • mark wadsworth says:

    Uncle Tom, you could make the whole “self-build” thing much simpler by scrapping the system whereby planning permission is given to land owners and replacing it with a system where planning permission is given to people.

    So, for example, as a wedding present from the state, a couple get given planning permission to build an ‘average’ house. They can use it to build a semi in an average area, a small flat in an expensive area or a rambling mansion in a very cheap area. Problem solved. For sure, Hyde Park is out of bounds, but there are plenty of other spaces, even in and around London, and failing that, knock down a five storey building and build a ten storey one.

    For sure, the owners of the land will want their profit, but at least the young couple will have the upper hand in negotiations. The planning permission would only be actually used if house prices rose above a certain level, in normal times (such as we haven’t seen for at least ten years), most people would rather buy an existing house than go to the trouble of having a new one built.

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  • Good subject with some interesting Points raised.

    All in all I think it makes great sense but it absolutely must exclude at all cost speculators and BTLers.

    I agree with the 5 year minimum ownership from completion term. I think also renting them
    Out is a no no. I appreciate the mobility arguement, but if you can’t commit to 5 years then maybe it’s not for you ?

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  • I quite like MWs idea about people permission.

    I was told by a South African at the weekend I couldn’t ride my Mountain Bike along a footpath in the middle of nowhere that linked two bridleways. Cheek of it, technically he was right but I do feel somewhat entitled to do certain things on my own country. That’s one of them, the other is a sensible plot of land for my family house and garden which I’m quite prepared to pay for the building of.

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  • str 2007,

    You are touching on the birthright issue – an emotive aspect that could gain traction if enough people signed up to it.

    – The notion that every citizen is entitled to their fair share of these islands’ lands.

    In practice the theory runs into all sorts of complications if you try to plan a pedantic and perfect analysis of the concept, but the notion has been embraced by politicians in the past in various ways – ‘homes for heros’ and ‘land settlement’ are slogans that come to mind.

    IIRC these were favoured rallying cries of the Liberal party of old.. Today’s rather depressed Cleggites might do worse than to raise the standard again..

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  • UT
    They should, they may stir things up and get quite A following.

    I’ve just discovered that for the price of a 3 bed semi here (southern Hampshire) I could move my family to the Eifel Mountains in Germany and buy 4 let apartments yielding 10% and a 4 bed house. Hmmm. If only I spoke German.

    Why do I feel so lured away from these (my) shores.

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  • mark wadsworth says:

    UT @ 18, yes, “homes for heroes” was a good slogan, and the “right to buy” idea tapped into that (even though it was implemented in a terrible fashion which merely delayed the problem by ten years and ended up making things worse once the dust had settled). The whole Georgist plan (LVT and Citizen’s Income) is merely the most direct and effective way of doing it.

    I’ve thought about the practicalities and simply giving young people planning permission at a certain age or when they get married is the simplest (short of LVT/CI). Working out the relative values – i.e. an average plot in an average area is worth the same as a small plot in an expensive area or a large one in a cheap area – is a bit fiddly but not impossible.

    So instead of you badgering the council for planning for your three acres brownfield, you would be looking for forty or fifty young couples who want to live in Oxford and have the money to pay for the construction of forty or fifty houses. Once built, there is no problem if they want to rent them out to somebody else – because their tenants ALSO have the choice of using up their own planning permission is they think that rents are too high.

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