Thursday, September 26, 2013

How baffling, Labour would like to stop land hording.

Housebuilders baffled by Ed Miliband's land grab threat

The Labour leader’s ultimatum was stark enough: “We will give developers a very clear message - either use the land or lose the land.” What did Miliband mean? Britain’s biggest property owners include the Crown Estate, the Church of England and the Ministry of Defence, not to mention the Queen herself. Supermarket groups, including Tesco and Asda, have large landbanks too. Would a Labour government send storm troopers round to seize their assets? A report, “Barriers to Housing Delivery”, by Molior London for Boris Johnson revealed that 45pc of the permitted homes in the capital are in the hands of “non-builders”.

Posted by khards @ 07:58 AM (2674 views)
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16 thoughts on “How baffling, Labour would like to stop land hording.

  • I for one am looking forward to the televised debates by the party leaders before the election. The press appears to be ganging up on Milliband and interpreting his policies as a repeat of the 1970’s. I saw the word Stalinist in one newspaper and television commentators have been blaming him for a drop in the value of shares in utilities and everyone’s pension funds (despite the fact that vested interests had a major impact in driving down the market yesterday). I have never been impressed with the man, but if he can start developing and fine tuning real policies with regards to long term availability of housing for the average person, fair pricing of basic necessities such as food rent and utilities then he may start to make people think. There is a balance to be achieved between socialism and extreme hedge fund capitalism, arguably both have failed.

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  • I for one am looking forward to the televised debates by the party leaders before the election. The press appears to be ganging up on Milliband and interpreting his policies as a repeat of the 1970’s. I saw the word Stalinist in one newspaper and television commentators have been blaming him for a drop in the value of shares in utilities and everyone’s pension funds (despite the fact that vested interests had a major impact in driving down the market yesterday). I have never been impressed with the man, but if he can start developing and fine tuning real policies with regards to long term availability of housing for the average person, fair pricing of basic necessities such as food rent and utilities then he may start to make people think. There is a balance to be achieved between socialism and extreme hedge fund capitalism, arguably both have failed.

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  • withrawing or shortening planning consent is what he is talking about

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  • An LVT would be better if a piece of land with planning permission and a piece of developed land are attracting simmilar LVT .

    Why won’t they talk about a full blown LVT ?

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  • BB – I agree there’s a balance needed but not sure Milliband is the man to resolve. I think Utilities and Fuel really p*ss people off and to be honest it’s understandable. Take BP, they get oil out the ground, sell it on the market, buy it back again, turn it into petrol and then sell that. Then they say they don’t make much money out of petrol and blame the price of oil. The same happens with Centrica and British Gas – people see their bills going up and dealers making piles of cash on the transactions along the way. But Directors have a legal obligation to act in the best interests of shareholders, whereas Milliband is saying they should be acting in the best interests of Consumers – that’s a pretty seismic shift.

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  • Substantially increasing the number of planning permits (or threatening to) thus making building land plentiful would stop hoarders as nobody wants to horde something that is not valuable or decreasing in value.

    It’s so very very easy, but no people want to spend years attempting to come up with another soloution that does not entail telling the over-leveraged that we are going to devalue the value of your land by issuing new building permits.

    It’s a bit like issuing thousands of new taxi permits in new york.

    I still can’t see any real solution’s to building until the balance of voters in the do-not camp outweigh the do-haves.

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  • Taffee beat me to it.

    The Lord giveth, the Lord taketh away. So councils can just make it clear that planning permissions – which the self same council has granted in the first place – actually expires after three years with no extensions and no crying or bleating.

    And when they are assessing planning applications in future, they will not award any to people who have allowed planning permissions to lapse in the past.

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  • that’ll get them building…..they couldn’t survive the writedown on their balance sheet as land with no planning is worth peanuts

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  • But its interesting that Milliband looks like has switched voting base. So before, I always thought Labour was state worker, home owner, immigrant, with a tailing off from the unions and working class. The unions and working class were always going to eventually notice wage suppression controls through immigration. Also, the Labour years were, lets be clear, when the housing shortage came into being. I can’t remember anything about a housing shortage back in 1997.
    He must have done his sums. Anyway, the people in the Labour party benefit financially from immigration, because thats what keeping your seat is at the end of the day, so I don’t believe a word he says. Also the party is rift with BTL who aren’t going to queer their own pitch.
    Maybe fear is causing him to shout out desperately for attention.

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  • cynicalsoothsayer says:

    @MW Just sell the land with lapsed planning to yet another of your holding companies and re-apply for planning. Simples

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  • @5 – “I still can’t see any real solution’s to building until the balance of voters in the do-not camp outweigh the do-haves.”

    I think you’ve hit the nail on the head!

    In the Telegraph article – “A study of landbanks by Savills last month said there was no evidence of hoarding”. Really?

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  • mark wadsworth says:

    CSS, yes, but the sensible bureaucrat traces up the corporate ownership to the very top and then works out if it’s the same people shuffling and re-applying.

    If a foreign company appears anywhere in the structure where the ownership is not disclosed then planning can be refused on principle.

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  • Making planning permission last a month, and charge on a monthly basis to renew it. maybe we could call it LPT 🙂

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  • Anything which gets the governance in this country shifted back towards the consumer is a good thing. Most of the problems stem from the economic power of corporations and the asset rich. Politicians tend to be more pragmatic (or pusillanimous) in government, but at least this breaks into the rubbish we’re always told that we all have to put up with it for the sake of a healthy economy (ha ha).

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  • As soon as a developer gets planning permission the value of land soars and they make a paper profit. So they are keen to get planning. In fact the way it works is that they will take an ‘option to buy’ on a land, pay a farmer say 10k an acre for the option, then if they gets planning they purchase the land, the farmer sells and gets a windfall. If they don’t get planning they don’t purchase the land. Sometimes getting permission can take years and developers build up land banks close to cities where they can see they will spread out. The problem is developers don’t just leave land there if they can build and make a profit. In the past developers used to develop whole sites and then sell, now they tend to take a much more two in the water approach ( with the exception of the high rises in London) and build small phases. the reasons why developers don’t build is:

    a. Some sites may have been bought at over market value. e.g. in the North of England where prices are 25% below the peak.
    b. they may have got planning permission on a site for 30 houses, but can fit 40 on there. It is commercially viable to build 30 and they will continue to go back to the planners and hope to get the number up over a few years.
    c. An area maybe on the way up or increasing in population. If they build now they might break even, but if they delay for a while it might be a really profitable little site
    d. The large builders will have many thousands of sites. Each year they will have to decide which ones will bring in the best yield. the wrong choices could be a disaster for their business.

    To be quite honest solving the housing problem in the UK is not about the miniscule proportion of land that has planning permission, it is about a government having bold plans and setting targets for house building on a revolutionary scale. London has huge problems of overcrowding, but there is plenty of land outside the M25 for a series of mini new towns that feed into the main arterial roads going into London. I would have thought compulsory purchases of farms for development, where the farmers get double the going rate would make more sense.

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  • mark wadsworth says:

    BB, sort of agreed to all that, except for this bit:

    “The problem is developers don’t just leave land there if they can build and make a profit.”

    As you say yoruself, they have already made two-thirds of the profit just by getting planning permission (widely acknowledged by builders to be true), and if land prices are expected to go up, they can make an even bigger profit by doing nothing rather than building and selling.

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