"Councils set for new housing role"

In brief, AARRGH!

Vince Cable MP has let himself down badly with all this, but the Lib Dems seem to have had the only half-way decent idea (assuming that the BBC reported this correctly): "... local authorities should be able to buy unused land at a discount rate to build new social housing."

Right. Land without planning permission is nigh worthless (£5,000 per acre for agricultural = £500 per residential plot). The only reason that 'unused land' can have any value whatsoever is because the self-same local authorities have granted planning. So I wouldn't object if they bought unused land banks for say £500 per plot, not £20,000 or £40,000 or whatever they're standing at in homebuilders' balance sheets. They can then re-sell these plots in the market for £10,000 or £20,000 a pop (or whatever the market value is) to private developers, making a handsome turn.

If there happens to be a house standing on it, I wouldn't really object if they bought the house from the owner (whether from the developer or the from the reckless borrower threatened with repossession) for the build-cost (between £50,000 and £80,000 for a three bed house, depending on whom you believe). Said reckless borrower will get grief from the bank, but hey, at least they're not made homeless. Even if the reckless lender makes the reckless borrower bankrupt, he's now a council tenant and has security of tenure. Assuming the reckless borrower still has a job, the council can cheerfully charge him a market rent.

Result? This will speed up the house price crash, it will teach reckless lenders and borrowers a lesson that they won't forget for the next ten or twenty years and it will be a great source of income for local authorities, e.g. if local authority pays £65,500 for a typical house and collects more than £63 a week in rent, that's a handsome inflation-proofed return of 5% gross. Sounds like a result to me!

Realistically, the chances of this happening are close to nil, but hey, that's politicians for you.