Using numbers from their investor relations page, I have cobbled together the following chart for your infotainment:
I think that Persimmon are fairly typical for the handful of large homebuilders, you can multiply it up for the others.
Thursday, 6 August 2015
Persimmon's land bank and number of completions
Subscribe to:
Post Comments (Atom)
12 comments:
Looking at this you can see why Corbyn's Land Value Tax on land banks (Chris Huhne used to have the same idea) could be a winner: it doesn't piss off the Homeownerist cannon fodder for starters.Once on the statute books, its up to sinister manipulative types (like us) to use it as the thin end of the wedge and widen out to other ways to socialise land values.
DBC, excellent point. I hadn't thought of that. And then… after nothing terrible has happened etc.
DBCR and MW. Yup.
It'd be interesting to do the same analysis for small developers. Mostly they only hold about two years WIP, i.e. 1 year to 3 year to allow for the permission cycle / cash flow.
So if you do start taxing land banks my guess is that you'd get a lot more sites developed by smaller builders, not as small as tiny, but a lot smaller than Persimmon. Persimmon would be reducing its land bank by selling plots. (Did I ever tell you that I bought a small site from Barratts once? This was exactly that case. Too small for them to develop with their overhead, but perfectly fine for a small developer.)
Could be that angry Homeownerist politicians will start shouting "But there's plenty of other cases where people sit on land waiting for the price to go up.Why pick on the developers?" Whereupon we can say: "Right we better stick LVT on the plentiful other cases just to be on the safe side."(You can imagine cases where people declare: "This isnt a land bank its a pig farm and have a few pigs around to give it some semblance of plausibility."Whereupon the LVT riposte comes: "Pretty high land values for pigs mate better be safe and levy LVT".All in all you can imagine arguments about what constitutes a true LVT-liable land bank and the criteria getting so stretched as to cover a full range of speculative holdings.
L, that is my general impression. The big ones get bigger and the little guys struggle along with bits and pieces left over.
DBC, either you have got planning or you have not.
It doesn't really matter about people hiding their land underneath pigs (a valuable source of bacon), because even if some land is ripe for getting planning but does not have it, there will be much less of a windfall gain when you get official planning because the tax payments will reduce the selling price of the plots.
So maybe people will defer applying for planning until the last minute before actually building, but it'll be interesting to see what Persimmon and their ilk do with the hundreds of thousands of plots for which they have planning.
As Lola says, chances are they will sell them off pronto, so the small building companies (who would otherwise have done the building as sub-contractors for Persimmon et al) can now make the (much smaller) windfall gains themselves.
Thats a good observation about "hiding land under pigs" So "farmers" get the benefit of there protected economic status including no inheritance tax etc whilst they hold the land and then if they get a change of use planning they get that benefit of the rise in residential land as if they had never been farmers in the first place. I put farmers inside quotation marks because Mark W has previously pointed out that a lot of economic entites classed as farems are not actulally doing farming.
@MW
The point about putting off applying for planning permission to the last moment could backfire against the secret land bankers.People are going to de facto bank the land but without applying for planning permission in large numbers when the Corbyn Tax kicks in,such an obvious evasion that steps will be mooted to deal with it such as "proper land tax".
ie, for example, the designated costodianns of what is designated as farm land are not paying an anual tax on it like council tax which applys to unoccupied land that is not famland.
Another way Corbyn is boxing pretty clever is over his plan for Quantitative Easing for the People which involves the Government resuming its right to create money but not just dishing it out to the people as unearned income as was included in the FT letter from Steve Keen and the 19 signatories but indirectly spreading the wealth through paying for a lot of infrastructure with it.This i) doesn't sound like the old Douglas Scheme of Social Credit in which the Major proposed that, if people wanted to play golf all day they should be given the wherewithal to do so and ii)shuts up the Georgist hobbyists who want to levy a huge level of LVT to pay for the infrastructure. You only need a low level of LVT just to keep land price inflation in check while all the heavy lifting is done by the reformed monetary system.
(Chris Huhne used to have the same idea)
Ah, that's why he ended up in prison.
"People are going to de facto bank the land but without applying for planning permission in large numbers when the Corbyn Tax kicks in,"
How do you tell the difference between land bankers and farmers. Do you classify anyone who owns land that might conceivably get PP as a land banker, even if they have been farming the land for decades? I think you have define land banks as land with PP, or else it just gets silly.
B, agreed on definition of "land banking".
As long as the tax is high enough to erode away all the windfall gain when planning is granted then that is quite sufficient.
Post a Comment