Council Bribes & Green rules add tens of thousands to new house costs.

Generali · 14 January 2013 at 7:06AM

HAMISH_MCTAVISH wrote: »

http://www.independent.co.uk/voices/comment/to-have-a-broom-cupboard-of-ones-own-why-solving-the-housing-crisis-is-not-an-impossible-dream-8448613.html

Interesting stuff.

So a bog standard 4 bed Barratt rabbit hutch costs 76K to build, PLUS up to 40K in council bribes, PLUS an additional 38K in green regulation costs by 2016, PLUS the land, PLUS builders profits.

It's a miracle they're still on sale in some parts of the country for under 200K... But I guarantee they won't be by 2016.

I can foresee a boom in older house prices as people are priced out of new builds in the near future.

It's ludicrous. Why not simply let builders build houses that people want to live in? The 3 bed semi, the cornerstone of the UK's urban housing market in the SE at least, was and remains popular because builders could supply what people not councils demanded.

As to the economic impact of this, it will mean that new houses depreciate in value more quickly as there is a lot more of the price that isn't buying you any land and it's the land that appreciates in value. Also it presumably means that the price of second hand properties rises as they become relatively more attractive.

It also pushes up the risks for banks lending high LTVs on new build. That probably closes off new build for FTBs.

michaels · 14 January 2013 at 7:39AM

Surely a lot depends on the future path of energy prices - if they do increase sharply every year then a low energy footprint could become valuable. Suppose averag3e energy bill is 4k then living in a house that only costs 2k leaves a big saving to cover a higher purchase price.

thescouselander · 14 January 2013 at 7:54AM

Perhaps this goes some way to explaining the issues I had in another thread. As I said new houses are now so small the Mrs and I consider them impractical to live in. As for the prices, £200k seems very optimistic to me - its more like a minimum of £260k round here. That's £260k for a house that can't be lived in - not a transaction I am willing to enter and I have no idea why other people do either.