Tuesday, 20 August 2013

"Rabbit hutch style homes face curb"

From the BBC:

The government is to consider curbing the building of so-called "rabbit hutches" in England. In a consultation being launched on Tuesday, it said it was considering the introduction of basic space standards for domesticated small mammals.

The Department for Communities and Local Government (DCLG) said England's pets from the family Leporidae of the order Lagomorpha may already have some of the smallest accommodation in Europe. Since the 1920s the average living space in enjoyed by our large eared pets has fallen by more than a third.

As a result the DCLG is also thinking about the possibility of "space labelling", which would give bunny owners a clear understanding of how much room there will be left for them to sit doing that cute thing with their noses when there is a saucer of water in one corner and a plate with carrots or lettuce next to it.

Major Retailers’ Rabbit Hutches Inhumane, Says Major Animal Charity

The idea has been welcomed by the Royal Society for the Prevention of Cruelty to Animals (RSPCA). A spokesman for the DCLG stated there were no plans to extend the regulations to homes intended for human habitation.

In a surprise move the DCLG also abolished 90 out of 100 planning rules that can be applied by local authorities.

"Moving from 100 standards to 10 is a good start in reducing red tape, while safeguarding good quality home-builder profits," said David Orr, the chief executive of the National Housing Federation.

"But we look forward to seeing the other 10 rules scrapped as well," he added. "Beggars can't be choosers and our experience is that we can sell these wannabe Homey fuckers just about any old pile of shit for just about any price we like as long as they've got a house number and if we just drip feed them onto the market."


Ben Jamin' said...

@MW, I know we've discussed this before, but I thought I'd throw this one out to your blog readers.

If land is 66%(on average) of the price of a home, what would happen if new regulations stipulating sizes and materials increased the building costs by 200%?

Like taxation, would the incidence of this just push the value of land down?
In this scenario to zero.

Mark Wadsworth said...

BJ, it's a bit more complicated than that because a house which is twice as big and twice as well built will sell for more money than a crap little rabbit hutch.

But broadly speaking yes, this would push down the price paid for existing houses a bit, push up the price of new houses a bit and push down the price of land a lot.

Ben Jamin' said...

There'd be a bit of moving up/down/sideways for a period of time, I agree, but in the end it would all pan out.

I think our laissez faire approach to building regs, is just another example where our brilliant economic advisers cannot get their heads around land being a monopoly, and the consequences of it.

They say, increase taxes on property, property prices go up.

Increase building costs, the price of property goes up.

Did they all bunk off their first year of economics at Uni?

Or are they just brainwashed?

Mark Wadsworth said...

BJ: "They say, increase taxes on property, property prices go up."

That's the weird thing.

Everybody knows or believes that if interest rates go up*, house prices go down.

This is because the selling price = rental value divided by interest rate.

So the cost of renting or buying is usually in equilibrium, and rents are fairly steady anyway. So regardless of the interest rate, the initial mortgage payments for somebody buying after a change in interest rates is still the same as the rents would have been.

So far so good.

Therefore, says the land value taxer, a tax on residential land will have much the same effect as higher mortgage interest rates and will push house prices down. it will not increase the monthly cost to the next generation of buyers.

Oh no, say the Homeys, LVT will push the price of housing up (bad) and in the next fucking breath they claim it will be "a dagger to the heart of property values" (also bad, TM John Redwood).

So what is it, you Homeys, will LVT push UP or push DOWN house prices?

This is beyond "brainwashed" it is DoubleThink.

* Actually it's a bit more complicated than that - it has more to do with the availability of credit than the interest rate, but let's run with it.

Lola said...

Re the rabbit hutch/space standards/land price thingy. My old man was a spec house builder. Every year he did a little sum to see if he could build what he considered to be a good two (preferably three) bed starter home including such things as a place to store the Hoover out of sight. By about 1987/88 he couldn't do it and compete. His FTB home, although better than the competition, was too costly for a FTB.

I reckon he'd loved LVT, once he'd 'got it'.

Mark Wadsworth said...

L, what would your Dad have done if he'd been in the position of the great land bankers nowadays and owned tens of thousands of plots with planning?

Lola said...

He was that big in the 60's - bigger than Barrats. All I can remember him doing is building and building. He certainly never land speculated as far as I know. In any event he priced on the replacement cost of the land. In other words he ignored false returns from land price inflation. From what I remember he had arguments about those 'profits' with his accountants (Baker Sutton) and with the IR.

In about 1970 he got out of the big development business - Benn Developments - and started on his own in Suffolk building out relatively small developments in places like Felixstowe. Perhaps 25 units max.

I do know that land and house price inflation drove him mad because he could properly plan. Plus the booms always messed up the tradesmen (generally by making them think that were worth more than they really are).