Build more houses

HAMISH_MCTAVISH

Graham_Devon wrote: »

So you agree that there is no point building more houses....but answer every inconvinient truth you come across on this forum with "build more houses"..

No Graham you prize ninny, I agree that there is no point building houses until funding returns.

Not that there is no point building houses.....

It just goes to show the importance of getting lending back into the market. So that sufficient houses can be built to house the growing population.

If you want no increase in lending, you're essentially supporting a worsening shortage, and sowing the seeds of the next boom.

We must build more houses to house the growing population, simple as that. Building more houses also happens to be the only way to reduce house prices in anything other than the short term. And increased lending is the only way to get more houses built.

Pretty simple really.

Of course, if we increase lending without building enough new houses, prices will certainly rise. But if we don't increase lending, and don't build enough houses, prices will rise anyway.

Now I know you hate dealing with reality like this, as you keep avoiding these issues..... No matter how many times it's pointed out to you.

ILW

I would suggest that a substantially tax on undeveloped building land would get houses built. Many developers are just sitting on large land banks waiting for prices to rise to maximise profits.

julieq

It's not about building more houses. It's about building more homes, and there will be a shift towards urban flats which you can already see in the pricey areas. As fuel prices increase relative to income you'll see more urban living anyway as people will need to be near the centres of employment. Flats needn't be 1960s style blocks, the trend elsewhere in the world is for very luxurious managed condos.

The long term issue with homebuilding isn't finding builders to do it anyway or financing builders, it's around planning restrictions which make land purchases difficult gambles. If you want more affordable homes for young people, write to your MP and campaign for planning law relaxation.

And yes, it's done with loans and credit. Where does the money come from to repay the loans? From around 25 years of earned income compounding with wage inflation and seniority increases, which is massively more than the purchase price of a home. The alternative being 40-50 years of rental which is a lot more costly because it increases with inflation.

And the side benefit is that the interest on the loans goes to pay returns for savers.

It's ridiculous to suggest that builders won't be able to build because first time buyers can't afford to buy incidentally. You don't need first time buyers, because everyone lives somewhere, and if first time buyers can't get loans they're forced to rent, providing an ROI for a landlord. That's why current loan restrictions are a bad thing, not a good thing, because they force more people into an expensive lifetime of rental and will inevitably create a two tier society.

Running_Horse

Nikel wrote: »

Im interested in self build. But wow, land is so pricey.

Does anyone know how much land the big builders are sitting on? If there was a big tax on unbuilt land with planning permission, then maybe that might stop the current rationing?

Much as I hate government intervention, maybe it needs central (or local) government to decide where houses are going to go, buy land at agricultural rates, then sell plots on cheaply to anyone who will build on it within twelve months.

PasturesNew

Linton wrote: »

Houses priced below an open market rate only work if they are available to a small number of people (essential workers or whatever). If they are available to all, and they are easily affordable what will happen?

The number which can be built in a few years will be far less than the number of people who want them. These people will outbid each other to get their nest. So prices will rise until only a few (oddly enough a number which more or less equals the number of houses available) can afford to buy them. So we are back to where we were.

Or are your low price houses to be allocated by some other mechanism than highest bidder? Perhaps under the Big Society we can have a volunteer group
of local worthies who decide who is most deserving.
Is that what you want?

3x 1 salary sorts it.
And it wouldn't be below market rate, it'd be the new lower market rate.

Linton

PasturesNew wrote: »

3x 1 salary sorts it.
And it wouldn't be below market rate, it'd be the new lower market rate.

If say everybody gets a 3X1 salary mortgage and there are not enough owner occupier homes available what happens...

Those with extra saved cash, help from parents etc will be able to outbid those without. So homes will still be unaffordable to all without additional finances - a bit like now really.

Mrs_Arcanum

Now if local authorities were told to release all the the land they have planned for development over the next 15 years at once, it might drive land values down.

CLAPTON

Graham_Devon wrote: »

This seems to be the answer to end all discusson at the moment. I say at the moment, as it seems to change throughout the year, but currently, it seems the in thing.

So, I ask those who state this a solution...

1. Who is going to build these houses? Afterall, the large builders we do have in the country at the moment are now swaying away from building FTB properties, as they simply can not sell them.

2. Who is going to be able to buy these houses? This relates to point 1, and the reason as to why builders are pulling out.

3. Why build more houses, when the current stock of new homes we do have, is, in many cases, unable to be sold on?

4. There seems to be a trend of stating that mortgage lending is at fault for people not being able to buy, and that prices have little to do with peoples ability to buy. Therefore, if there are mortgage problems, what is the point of building more houses which people can't get mortgages on? I ask because the same people who blame low mortgage lending, also state more houses should be built. Surely a contradictory point?

4. Is this whole "build more houses" a simple easy answer to questions, rather than a possible solution? It seems that way to me. Seems a bit like answering the peak oil question with "well find more".

Getting a bit bored of asking this in other threads and it being ignored, so thought I'd highlight it more with a seperate thread. Let's get to the bottom of whether buolding more houses is actually a possible solution (in terms of being do-able and profitable for builders to undertake it), or merely a soundbite.

so basically if in the south east an additional 1 million houses were built, you don't think the price of property would drop at all?

julieq

Honestly, get over this obsession with 3x single salary as a top limit on lending. There's no reason for it on a risk basis, and if you cap lending arbitrarily in a situation where new supply of homes is far lower than new household creation, you just end up expanding the professional rented sector who just buy everything up at 3.1x average salary (ok, I know it's not as simple as that, but it's to make the point that they only need to be paying marginally more than the prospective private owner occupiers can raise) and make a mint renting it back to people who can't buy at pretty much whatever rent they choose to charge.

It's up to lenders to decide what they are prepared to lend. But the average throughout the last boom didn't exceed 3.5x joint salaries, which is perfectly reasonable. In fact high multiples didn't ever distort the market, they just provided a route in for good risks in particular areas of very high demand, for example London and parts of the South East. Didn't cause a problem,

dori2o

Instead of building houses, why not bring the hundreds of thousands of boarded up properties across the country back into use.