Thursday 28 November 2013

Truly Affordable Housing

Recently I heard about some friends of a friend who were struggling to sell their house. It seemed like the sort of place that would be snapped up at once: good condition, tastefully decorated three bedroom cottage on a quiet country lane facing south with its back to woodland, close to the sea, with paddocks, in fact the Faux Bucolic Rural Idyll made bricks and mortar. The snag was the lease, or more precisely, the freeholder: The National Trust. Any good solicitor will tell you not to touch a NT lease with a bargepole - their powers are pretty absolute and pretty arbitrary and the National Trust Act exempts them from modern leasehold reform legislation.

That got me thinking: Local Authorities want to make affordable housing available, but its not possible to sell affordable land. Selling it at undervalue simply gives the purchaser an windfall gain when they sell. However, the LA or other organisation could remain the freeholder and sell a 999 year lease, and that lease can reduce the value of the land to an affordable level, by stipulating who the property can and cannot be sold on to. Now the value of building land is governed by what people are prepared to pay and what they are prepared to pay is governed by what they can afford, so if the house can only be sold to people that can't afford much, then it will never be priced beyond those people's reach. So the inhabitants get a house they can afford, without having to rent.

Of course, they don't get to take part on the Great British Housing Ponzi Scheme, but you can't have everything.

6 comments:

Graeme said...

wasn't that supposed to be the guiding force behind housing cooperatives?

Mark Wadsworth said...

B, there is a simple way of doing this, it is called "giving away building more or less for free but making it subject to LVT".

Lola said...

"Faux Bucolic Rural Idyll" Oi! that wot I live in...

Bayard said...

Mark, LVT and CI: two things that all right-thinking people know would work better than what we have now, but also know to be electoral poison.
Anyway, I am talking about what can be done on a small scale here and now and not what needs a radical change to the nation's fiscal policy.

Bayard said...

G, quite possibly, do you know more on the subject?

Lola said...

B. I know. I just cannot fathom why LVT + CI is so toxic? When I can get away with it - (or rather Mrs L forgets t tell me to shut up) - I put and agrue these points with people, and they all mostly get it.

So why is it electoral poison?

I think it is because the government do not want to make the arguments as it immediately destroys 80% of the reason for them to exist.

Turkeys. Votes. Christmas.