The Elites and the global warming scam

Road_Hog

Yes, this is on topic, do read on.

Most people are too busy watching X-Factor or the latest dross, to be concerned about what is happening in the UK/World.

One of the greatest scams going is global warming, which transfers wealth from the poor to the rich, i.e. taxes from the poor (just look at your energy bills rising even though you are cutting back) to subsidies to the rich for carbon schemes.

Here's the latest wheeze that will hit new home buyers in the pocket.

"Of that flight from reality though, there can be no more spectacular than the government's quest for the "zero carbon" house, coming at a time when Cameron and Clegg are lamenting that house-building is at its lowest level since the 1920s.

Yet, when a whole generation of would-be first-time buyers are having to reconcile themselves to decades of renting properties, the government is phasing in a new set of Building Regulations which will require that, by 2016, all new homes must be "zero carbon" in terms of energy-use and emissions.

According to official estimates in the Code for Sustainable Homes, this will increase the cost of building a house by up to £37,793 or up to 66 percent in the case of a two-bedroomed starter flat of the type favoured by first-time buyers."


The article in full,

http://eureferendum.blogspot.com/2011/11/greatest-delusion-of-them-all.html

chucknorris

This will affect land prices more than house prices, the land price that developers pay for the land is a residual cost (the total development value less building, professional fees, finance, developer's profit etc). So ultimately the value of land will fall to absorb these extra costs, a zero carbon house will of course have additional value to a similar but less efficient house and this could be an extra cost but is justified by future savings in energy bills.

The real problem coming soon is to EXISTING home owners as the Gov has pledged to make ALL homes (and businesses) reduce their carbon by 80% in 2050, with an interim target of reducing 20% by 2020. There will be subsidies to help (such as the green deal etc) but eventually there will be sticks as well as carrots used.

It will be a particular problem to home owners with solid (not cavity) walls as insulation will need to be fitted either on the outside (expensive and problematic aesthetically) or on the inside, which will be disruptive and slightly reduce floor areas, although some types such as Sema insulation avoid this, but I don't know if this system wqhich is only 10mm thick provides a high enough U value improvement to the external wall, I have only just started looking into this.

Road_Hog

chucknorris wrote: »

This will affect land prices more than housing costs, the land price that developers pay for the land is a residual cost (the total development value less building, professional fees, finance, developer's profit etc).

No it won't, it will merely add to the cost of buying a house and if there are no buyers, then builders will do what they are doing now, only build profitable larger houses where there are still customers.

chucknorris wrote: »

So ultimately the value of land will fall to absorb these extra costs, a zero carbon house will of course have additional value to a similar but less efficient house and this could be an extra cost but is justified by future savings in energy bills.

Nope, the only added value will be the added profits of the house builder. And also the corporations that are in the 'green' trade that will lap up any subsidies

chucknorris wrote: »

The real problem coming soon is to EXISTING home owners as the Gov has pledged to make ALL homes (and businesses) reduce their carbon by 80% in 2050, with an interim target of reducing 20% by 2020. There will be subsidies to help (such as the green deal etc) but eventually there will be sticks as well as carrots used.

Yes, that will be another opportunity to tax the people, transferring wealth from the poorest to the richest.

chucknorris wrote: »

It will be a particular problem to home owners with solid (not cavity) walls as insulation will need to be fitted either on the outside (expensive and problematic aesthetically) or on the inside, which will be disruptive and slightly reduce floor areas (although some types such as Sema insulation avoid this).

I'm sure those in this particular industry will be more than happy to make a big profit from homeowners forced to pay their prices and no doubt some ex MPs and Ministers will be on the board of directors acting as advisors (in return for having previously passing the required legislation).

chucknorris

Road_Hog wrote: »

No it won't, it will merely add to the cost of buying a house and if there are no buyers, then builders will do what they are doing now, only build profitable larger houses where there are still customers.



.

Sorry but that's just not true, as I explained to one of my students who came to me with a dissertation idea last year on this very subject. He works for a large housing developer, I explained to him about residual land value calculations and advised him to go and speak to the department that buys land in the company that he works for and they confirmed to him that land values will drop to absorb most of this cost, for the reason that I said, the land is a residual cost.

He wanted to focus his dissertation on the additional cost that future home owners would pay, after talking to me and his land buying dept he re-focused it on how it would affect land values, he got a 2:1.

chewmylegoff

Well as long as some man said it, it must be true!

chucknorris

chewmylegoff wrote: »

Well as long as some man said it, it must be true!

It's not just a case of some man saying it, that's how the process works in development. Land residual calculations are how you arrive at the value of land. Do you imagine they just pull a figure out of the air and decide that's what they will pay for the land?

The value of land is worth what you can sell a completed development for less your costs and profit.

Mary_Hartnell

http://en.wikiquote.org/wiki/David_Ricardo

We have known this since Napoleonic times.

That is why a land tax such, as site value rates, is so attractive. It just milks the value of land, without upsetting the relative values of other commercial inputs.

At the moment green field land is "subsidised": It pays no rates, almost no stamp duty and it saves 40% Inheritance Tax while being liable ot CGT at 28% unless rolled over. l

chewmylegoff

chucknorris wrote: »

It's not just a case of some man saying it, that's how the process works in development. Land residual calculations are how you arrive at the value of land. Do you imagine they just pull a figure out of the air and decide that's what they will pay for the land?

The value of land is worth what you can sell a completed development for less your costs and profit.

The value of land is the amount that a willing purchaser and seller transact at. It doesn't just fall because a man one of your students talked to says that in theory it should. A vendor isn't suddenly going to accept less money for anything just because the pirchaser's circumstances have changed. See the housing market for evidence...

chucknorris

chewmylegoff wrote: »

The value of land is the amount that a willing purchaser and seller transact at. It doesn't just fall because a man one of your students talked to says that in theory it should. A vendor isn't suddenly going to accept less money for anything just because the pirchaser's circumstances have changed. See the housing market for evidence...

I'm a chartered quantity surveyor by profession (although working as a university lecturer teaching on a quantity surveying degree course now) during my career as a quantity surveyor I provided our clients (developers etc) with cost estimates of their proposed buildings specifically so that they could calculate the land residual cost and bid for the land. I know what I am talking about this is an area of my professional expertise.

I didn't ask the student to ask his land buying department because the answer was not certain, of course it was certain. I directed him to ask because I knew he would get both confirmation of what I had just informed him but more importantly advice as to the degree that this would affect land values, which was what I had suggested that he changed the focus of his hypothesis of his dissertation to.

A developer will NOT agree to buy land for a development where that cost would (at feasibilty stage) lead to a loss (or not provide adequate profit), hence the developer needs to calculate the maximum value of that land (to him) based on what he can build on it. Residual land value calculations are the industry standard as a basis for valuing development land.

Mary_Hartnell

Talking of the house market, has anyone picked up on day time C4 TV "Sealed Bid".
= Pimp my Pad and put in free advertising from Matalan.
I was not at home on Monday but the interesting thing is that in the last three programmes, made back in the summer, none of the houses made their seller/agent's questimated price and the one that was subsequently argued up a bit after the bids closed, fell through before exchange of contracts.

I think the land owners are beginning to get the message that the end user sets the price!

There is always a seller:
Debt.
Divorce.
Death.

So far we have had one of each I think.

Anyway the owners have had a free hour long advert on C4 - make an orderly queue - there are three "cheep" West Country "bargains" ready for the spring blip in house prices.

Road_Hog

Mary_Hartnell wrote: »

I think the land owners are beginning to get the message that the end user sets the price!

No he doesn't. He can make an offer, but the owner sets the selling price and he can always walk away.