Are Developers and Builders Sitting on Unused Land?

ILW

Have heard that many of the big builders are sitting on quite a lot of land, which they are in effect hoarding and waiting for prices to rise. Anybody know if this is the case?

macaque_2

ILW wrote: »

Have heard that many of the big builders are sitting on quite a lot of land, which they are in effect hoarding and waiting for prices to rise. Anybody know if this is the case?

The evidence would suggest you are right and it is little short of market manipulation. Perhaps the new planning laws might ease this problem by making it much less attrative for builders to hoard land and ration construction.

Analysis of the number of homes being built by the same developers has revealed that the gap between the number of completed properties and the amount of land stored in their "land banks" has grown to the highest level since 1998.

Now figures taken from the UK's 11 largest housing developers have revealed that they are sitting on land that has no planning permission – the equivalent of 335,731 homes.

http://www.telegraph.co.uk/property/propertynews/8726999/Housing-developers-store-up-land-ahead-of-planning-reforms.html

ILW

So, it appears that by forcing the owners of this land to develop it for housing could clear the housing shortage in on hit.

lynzpower

Um of course it is true, its been going on for decades.

CLAPTON

it always seems strange to me that, as we all know, the entire British business industy is dominated by short termism (I know this because it's been said in the newspapers, parliament, the good and good etc.)

Except of course the building industry; here CEOs deliberately forgo decent profits on their watch to enable future CEOs in 10, 25, 20 or even more years time can make super profits and be stars.

Which is why of course that buying shares in house builders is a guarenteed way to untold riches

Of course the planning laws that dictate what can be build (30% 'affordable/social housing etc) has nothing to do with anything

ILW

It would be relatively simple to force the owners of this develpement land to either develop or sell to someone that will, or if they wish do go on sitting on it, it could be a useful source of income for local councils. A simple tax on the land seems to have no down side that I can see.

HAMISH_MCTAVISH

ILW wrote: »

It would be relatively simple to force the owners of this develpement land to either develop or sell to someone that will,

Really?

It's relatively simple to force a company to put itself out of business by building houses that it cannot sell because the potential buyers can't get mortgages?

Just....wow.

or if they wish do go on sitting on it, it could be a useful source of income for local councils. A simple tax on the land seems to have no down side that I can see.

No downside eh?

Large quantities of the builders land bank has no planning permission yet, so is booked at agricultural land values. If you try to tax it they'll simply sell it back to farmers and it'll be gone.

So then you get no tax revenue AND no new houses.

And of the land that does have planning permission, the builders still can't build what they can't sell. So until mortgages become available on reasonable terms to FTB-s again, the builders simply can't build houses on it. And any tax accrued will just be passed onto the buyers wen funding does eventually return.

So this sounds like a good plan overall...... If fewer houses being built at more expensive prices is your goal.

CLAPTON

whilst I don't like the word 'force' the idea of a land value tax does tick most of the right boxes... puts a price on the social value of the land and a significant incentive to develop land useage in an efficient way; so once land had been given planning permission its value would rise considerably and so the tax levy which would incentivise development

mind you any change to property taxes will have major political impact as there will be winners and losers

HAMISH_MCTAVISH

ILW wrote: »

So, it appears that by forcing the owners of this land to develop it for housing could clear the housing shortage in on hit.

The current housing shortage is a million houses. And it's growing at somewhere around 150,000 houses a year.

I doubt there's enough land already banked to clear it.

SteveV2

Would you build houses you can't sell?

If it wasn't for HA I am pretty sure one of the big companies would have folded.

CLAPTON

HAMISH_MCTAVISH wrote: »

The current housing shortage is a million houses. And it's growing at somewhere around 150,000 houses a year.

I doubt there's enough land already banked to clear it.

I would hope no one would say the land value taxes were an panacea for our housing shortage, but putting a tax on the value of land, where or not used would encourage development
Obviously isue like our daft planning laws and finance availability and willing buyers also need addressing.