Monday, 29 September 2014

Torys Plan 100,000 New Starter Homes

From the BEEB "First-time buyers under 40 to get 20% off under Tory plan" see here

On closer inspection, it says doesn't say how this 20% off is guaranteed. Unless that means they will  be capping prices. If not, why should the developers not just charge the full market rate? All be it, only to UK citizens, under 40s, first time buyers. My guess is, any "savings" from being granted permission to build on brownfield industrial sites, less green building regulations and no section 106 agreements will only be capitalised into greater profits for the building companies.

We've seen it all time and again. They own land give them money.

Would it not be better if the Government built and sold these houses themselves, but charge the site rental value in perpetuity?

That way, people get to own their own home for less than half the current selling price.

The Government gets to keep the value it creates by granting planning permission and infrastructure it builds. So land rent is not privatised.

Unlike Council Housing the owner would be responsible for the upkeep, and gets to keep the value of improvements made upon sale.

And because a site rent is paid every year, those homes would always be put to their best use. So, couples whose children had grown up and left, would be more likely to downsize.

All the economic benefits of council housing (see Singapore) but with none of the downsides.


Ian Hills said...

I think the plan is really to throw yet more taxpayers' money at the banks, which would offer the mortgages.

A fringe benefit will be the provision of a haven for white flighters as more immigrants arrive.

Which might stop them voting UKIP or BNP.

Mark Wadsworth said...

This will have no overall effect on prices whatsoever because of "price discrimination".

In other words, builders will put up prices for the non-earmarked homes (to be bought by Boomers) by 10% and drop prices on the earmarked ones by 10%.

There will be the same number of cash rich Boomers chasing the slightly smaller number of non-earmarked ones, pushing up prices for those by 10%.

So what the Land Bankers loses on the under-40 swing it gains on the Boomer roundabout and can, with a straight face, say that it is
selling homes to under 40s for 20% lesss than to the Cash Rich Hard Working Putting Something Away For Retirement And Fuck Our Children Boomers.

DBC Reed said...

Ben Jammin's proposal for the gov to build and sell houses for bricks and mortar value only then charge a ground rent in perpetuity is exactly how the original garden cities were set up.It's an LVT variant as were the post war Development Corporations that bought land at agricultural prices ,gave themselves planning permission then disposed of the houses for sale or rent while pocketing the vast differential.(Maybe this is more an example of compensated land nationalisation.)

Mark Wadsworth said...

DCB, good one.

Sadly, as we know, people always succumb to Home-Owner-Ism in the end. Even people who start off with the loftiest of ideals, like a Kibbutz in Israel, end up privatising the land.