Some Christmas cheer from the Guardian

Graham_Devon

CLAPTON wrote: »

are you saying that of all the companies and people in the UK, firms that also build houses should be specifically banned from buying land while is OK for all others to own it?

If I was saying that, I would have said it.

I don't know why you keep insisting on doing this "are you saying" thing and then going off on a ridiculous tangent.

No one would be banned from owning land. Just if they buy it to develop it, they would have X amount of time to do so before hitting a land tax.

CLAPTON

Graham_Devon wrote: »

If I was saying that, I would have said it.

I don't know why you keep insisting on doing this "are you saying" thing and then going off on a ridiculous tangent.

No one would be banned from owning land. Just if they buy it to develop it, they would have X amount of time to do so before hitting a land tax.

'Are you saying' you want a new law that says a purchaser of land MUST declare their purpose?
(currently land purchase in a free trade between a willing seller and a willing buyer without the government being involved.)


Also can you clarify if you expect that house builders will increase their profits now they are building and selling more houses or do you expect their profits to fall on the land hoarding theory?

wotsthat

Graham_Devon wrote: »

No one would be banned from owning land. Just if they buy it to develop it, they would have X amount of time to do so before hitting a land tax.

How would that work? From what you're saying it seems that there's little intention to to develop land so they wouldn't have to pay the tax anyway.

Loughton_Monkey

Graham_Devon wrote: »

....We shouldn't get confused here. What the article is suggesting is that that housing developers now see land development as their primary focus. Not house building. So some of this land, which they could build house on, and could gain planning permission for, may never see houses built on them.

Was it Persimmon who pulled out of the Welsh market recently? Whoeever it was, they are still buying land in Wales. They just won't build any houses on it (until the welsh assembly bends over at least). Surely that demonstrates that planning isn't the biggest issue? .....

Are you saying that planning permission is not the biggest issue here, and that some land may never see houses built on it?

If so, I tend to agree.

Builders are generally not stupid. As has amply been demonstrated in Wales, builders will not build if they can't sell the house for a profit. Why should they? They needed the very modest rise in house prices that only started less than a year ago, but that still wasn't enough until mid year when they could have some confidence in being able to sell at reasonable prices.

Clearly, we are now at a point where it has become profitable to build. Probably still only in some areas. So we need more of the (coming) house price inflation to be seen before housing starts ramp up to anything like required levels.

If you were a bespoke Bond Street Tailor, I might imagine you might be looking to sell 800 suits to extremely well-healed people for £1,200 a pop and more. And yet your shop would conatin enough material to make 8,000 suits wouldn't it? High quality Cashmere cloth will hold its value almost indefinitely won't it? When, say, a rich guy wanders in wanting the best cashmere suit with which to receive his CBE from Her Majesty, you don't want the embarassment of explaining why you only have plain black or dark blue, and not the hound's tooth....

Builders are a bit like that. They must have large enough stocks to seize immediately onto the opportunity that (say) Berkshire prices break through to profitable levels so they can dust off those old Berkshire plots.....

I strongly suspect they all have their spreadsheets, worked up over the last 5 years of low activity, where they have analysed plot by plot what house prices must go up by, area by area, to make it worthwhile to buy another few shovels and recruit a few more brickies. I wouldn't mind betting that most of the North is still far too low for them to bother. What about those with planning permission for "Excutive" houses, but the area only needs starter homes?

Just as there is no law to tell the tailor to run up another 500 suits and 'try' to sell them off the peg, then there is no law to say that a builder must develop land if it is unprofitable so to do. Our Nanny State has seen to it that builders must pay, pay, pay, and pay again through the nose for more infrastructure, more 'green-ness', more Health & Safety nonsense, probably more insurance.... not forgetting that land becomes scarcer and more expensive the more it's used up.

When they finally get that small estate up, at £250K per house, I doubt very much if they are making more than 10% net clear. Want more houses to be built? Then applaud every % of house price inflation because that's the only thing that is going to ramp up the new starts to anything like the required numbers.

... and those idiots who think house prices need to (will) drop by 20% must live in cloud cuckoo land.

caronoel

Thought it was timely to raise this topic as christmas just seems to get earlier and earlier each year.

the wise old owls on this thread are still clinging on for a price collapse.

Since this thread was posted we have had 20%+ house price rises in whole swathes of the country.

Happy Christmas all and here's to another year of healthy price rises in 2016

kinger101

A house price rise isn't just for Christmas.

chucknorris

kinger101 wrote: »

A house price rise isn't just for Christmas.

No it definitely isn't, it is a long term investment, which is why I have told certain bears on quite a number of occasions, not to judge property investment only on its initial yield.

mayonnaise

This forum often feels like groundhog day.
Graham struggling with the difference between an asset and a consumable.
It could have been posted yesterday.

kinger101

chucknorris wrote: »

No it definitely isn't, it is a long term investment, which is why I have told certain bears on quite a number of occasions, not to judge property investment only on its initial yield.

Quite a few people seem to miss the point that it's leveraged too. You can't pop into the bank because you want £200K to stick into the FTSE 250.

chucknorris

kinger101 wrote: »

Quite a few people seem to miss the point that it's leveraged too. You can't pop into the bank because you want £200K to stick into the FTSE 250.

It would be very interesting to see what would happen to the ftse if you could. I believe that some Chinese investors do/did borrow to buy stocks, I imagine the volatility would reach new highs and lows.