tag:blogger.com,1999:blog-1141932539860553199.post4968801207758707504..comments2024-03-05T10:52:24.691+00:00Comments on Mark Wadsworth: Land Speculation and Housing DesignMark Wadsworthhttp://www.blogger.com/profile/07733511175178098449noreply@blogger.comBlogger13125tag:blogger.com,1999:blog-1141932539860553199.post-74902106807988055552014-07-23T20:20:42.660+01:002014-07-23T20:20:42.660+01:00Many people blame 'self cert' mortgage len...Many people blame 'self cert' mortgage lending for driving up HP by providing 'excessive' credit. From my own experience I disagree with this, in part.<br /><br />The 1986 Financial Services reforms - the scrapping of all the special privileges and restrictive practices the <i>introduction</i> regulation - did indeed open up the mortgage lending market. But, self cert per se was never a problem before 1999 (ish). Experienced lenders had strict multiple and deposit / equity criteria and really serviced those clients with variable or largely cash income (market traders for example). Mostly these type of clients are self motivated and tend to be able to make money. The 'good' Self cert lenders had very low impairment records - lower than mainstream players.<br /><br />But, once Brown Balls picked up the homeownerist baton post 1997 the massive expansion of money and credit and the utterly flawed regulatory reforms drove a massive expansion in self cert providers and lending as well as driving lenders away from simple income multiples to 'affordability' criteria. The amount or mortgage funding washing about by 2007 was truly epic.<br /><br />Distortions like this lead to speculative behaviours. And drive up land prices.<br /><br />There are more forces acting on spec house builders than simple greed. Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-54853951539927193962014-07-23T19:49:45.087+01:002014-07-23T19:49:45.087+01:00@Din
It's a case of spending priorities.
Big...@Din<br /><br />It's a case of spending priorities.<br /><br />Big house, rubbish location? Smaller home, better location?<br /><br />As they say it's "Location, location, location".<br /><br />So, landowners price the minimum size people will possible pay for, and pocket the rest themselves.<br /><br />You could introduce minimum sizes, which would be good. This wouldn't push up aggregate HP's. But, it's a blunt tool, as it's the Government trying to second guess things. <br /><br />Much better to let the market sort it out. Which you can't have while land rent is privatised.<br /><br /> <br /><br /> benjhttps://www.blogger.com/profile/11544297406005346095noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-48545731265284827452014-07-23T19:47:37.960+01:002014-07-23T19:47:37.960+01:00PC, social housing was A Good Thing and will alway...PC, social housing was A Good Thing and will always be necessary as a sticking plaster, whatever the basic system is, even with LVT, you'll always need about twenty per cent social housing.<br /><br />If you have rent controls, clearly there will be an undersupply of private rented and it will be a bit grotty. Which is fine in the short term, but for longer term, social housing is better.<br /><br />Plus, the low rents in social housing indirectly put a cap on private sector rents.<br /><br />So the explanation you were offered is circular and nonsensical. <br /><br />The increase in owner-occupation rates were because private landlords threw in the towel and sold up, and two-thirds of new construction went to owner-occupiers, not to BTLs.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-71534617612474672952014-07-23T18:53:52.784+01:002014-07-23T18:53:52.784+01:00@MW It's not relevant. I only wondered because...@MW It's not relevant. I only wondered because someone was telling me that the reason home ownership rose steadily after the war was due less to rent controls and more to do with tenants being taken out of the private market and installed in the large number of council flats that were being built, freeing up private sector housing for purchase. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-73801380961514681172014-07-23T18:28:33.862+01:002014-07-23T18:28:33.862+01:00PC, about a third, although I don't see the re...PC, about a third, although I don't see the relevance. <br /><br />Din, no it's not circular. If you have a sensible tax system (LVT) or at least went back to the pre-1980s system, we'd be back to the old ways with larger, cheaper houses.Mark Wadsworthhttps://www.blogger.com/profile/07733511175178098449noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-24178086450753673282014-07-23T18:17:52.364+01:002014-07-23T18:17:52.364+01:00Its a slightly circular situation. If people build...Its a slightly circular situation. If people build small and buyers go along with it then land values and prices per acre will go up thus apparently<br />"necessitating" smaller buildings on the accounts of the builder.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-41094553207494671992014-07-23T16:46:23.490+01:002014-07-23T16:46:23.490+01:00@ D. Land prices. And for all the negative issue...@ D. Land prices. And for all the negative issues highlighted by MW and I. He looked at what Barratts (say) were selling as a FTB house - small, two bed, no storage etc etc - and then put his ideal FTB house spec - three bed, reasonable but still modestly sized, some storage, garden +/- garage - up for costing and it couldn't be done. Such a house was only affordable if you were moving up...as it were. Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-38455201999480302242014-07-23T16:42:37.626+01:002014-07-23T16:42:37.626+01:00Of those 200-300,000 homes built per year 45-80 ho...Of those 200-300,000 homes built per year 45-80 how many were private? Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-16983207589853100852014-07-23T14:36:35.840+01:002014-07-23T14:36:35.840+01:00So why could he no longer make a profit building ...So why could he no longer make a profit building and selling the three bedroomDinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-76221887393193234982014-07-23T14:34:04.898+01:002014-07-23T14:34:04.898+01:00@ Lola
Not builders fault at all. House building ...@ Lola<br /><br />Not builders fault at all. House building is elastic in supply. It can't be.<br /><br />Good to see Merryn Somerset Webb is on the case, again.<br /><br />http://moneyweek.com/why-britain-has-the-nastiest-new-homes-in-europe/#comment-53696benjhttps://www.blogger.com/profile/11544297406005346095noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-47697850760385761172014-07-23T14:29:33.496+01:002014-07-23T14:29:33.496+01:00@JM - So you agree then that it is not really deve...@JM - So you agree then that it is not really developers 'fault' that they have become speculators. It's the natural result of bad public policy?Lolahttps://www.blogger.com/profile/04586735342675041312noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-61851696941659154692014-07-23T09:52:18.457+01:002014-07-23T09:52:18.457+01:00The incidence of building regulations, like tax, f...The incidence of building regulations, like tax, falls on land.<br /><br />If you reduce regulation, homes get smaller and the value of land rises.<br /><br />We could increased the cost of building a new home by 200% and aggregate HP's would not rise.<br /><br />Not that this is a great idea, as it only increases deadweight costs.<br /><br />Far better to have a LVT. This way HP's would drop, and with their extra discretionary income, people will fork out more to buy a bigger better home.<br /><br />That's what happens when you have a level playing field. Privatised land rents distort pretty much everything. Home size included.benjhttps://www.blogger.com/profile/11544297406005346095noreply@blogger.comtag:blogger.com,1999:blog-1141932539860553199.post-87409695956002907762014-07-23T09:45:48.119+01:002014-07-23T09:45:48.119+01:00http://www.dailymail.co.uk/news/article-1054557/Ra...http://www.dailymail.co.uk/news/article-1054557/Rabbit-hutch-Britain-UKs-new-homes-smallest-Europe.html<br /><br /><br />"'England and Wales are the only parts of Europe where house-building is unregulated by legally binding minimum space standards.'"benjhttps://www.blogger.com/profile/11544297406005346095noreply@blogger.com