The stich up keepiing homes unaffordable

CLAPTON

ILW wrote: »

Not enough to force a holder to either develop or sell though.

the land will be developed in due course when there is sufficient demand for new properties

selling is an option but there needs to be a buyer offering a reasonable price (and presumbly intends to develop themselves)

we are just coming out of a period of very low effective demand: it would be a major surprise if there weren't significant land banks

when they bought the land others could have bid and bought it instead: they had no monopoly on the right to buy it.

Graham_Devon

ukcarper wrote: »

Not sure how the council can build house without cost

No one has suggested it would be done without cost.

But investment will bring jobs and growth.

More than 350 councils are calling on the government to let them get building homes.

That's significant by anyone's measure. Surely?

More than 350 councils in England are calling for the freedom to make extra investment in housing to help clear a backlog of almost 400,000 homes given planning permission but yet to be built.

It's been on the radio now and the problems, bar the one laid out above are several. Builders are taking much longer to complete plots now, thereby releasing houses slowly, pushing up demand, but also leaving families living on building plots for sometimes years.

They are using phased building, building the amenities in the very last phase, meaning the park you were told would be built isn't built for some time (sometimes years).

Buses are not being put on route until the houses are completed, but the houses are taking forever to complete as builders concentrate on keeping supply low and demand high.

It's all a mess and all about delaying and profiting. It also seems there is nothing stopping builders getting planning permission for plots, starting phase 1 and 2 and then never actually getting as far as phase 3.....therefore, the extra services don't get completed until the builder decides they will start phase 3.

This isn't just heresay, it's all evidenced. It's all being dragged out.

Something needs to get them using, rather than abusing this planning.

The report, undertaken by construction industry analysts Glenigan, also found that on average it was taking 27 months for developers to complete building work after receiving planning permission; seven months longer than in 2007-8. Last year the average was 25 months.

ILW

CLAPTON wrote: »

the land will be developed in due course when there is sufficient demand for new properties

selling is an option but there needs to be a buyer offering a reasonable price (and presumbly intends to develop themselves)

we are just coming out of a period of very low effective demand: it would be a major surprise if there weren't significant land banks

when they bought the land others could have bid and bought it instead: they had no monopoly on the right to buy it.

There will always be a buyer if the price is right and a substantial tax on just holding the land undeveloped would ensure that the buyer would build.

There would be winners and losers, but there would also be more houses.

Prothet_of_Doom

My thoughts: The Building industry is a varied and diverse culture, but the big boys are required to make a "return on investment" and a "Return on Sales" by their sahreholders, who tend to be pension companies and the like. They are also involved in industrial, civil construction on a global scale. In order to maintain that return on sales they just stop building, when the market price is too low. They can do this because they actually employ very few people, and deal with lots of contract workers who are self employed or ltd companies, so they can flex requirements easily.
Whilst there are other smaller companies, these would be forced to follow to remain competitive. So are they manipulating the price, or meeting shareholder requirements to achieve return on sales of a particular figure ?

Graham_Devon

CLAPTON wrote: »

the land will be developed in due course when there is sufficient demand for new properties

There IS sufficient demand. That's why they sell and why prices are going skyward.

There are people signed up waiting for the home to be built. They prolong is so that the demand increases.

martinsurrey

martinsurrey wrote: »

you are confusing strategic land bank with detailed planning permission.

a green fieild site may be in the stategic land bank as 2,000 homes, but it might take 15 years to get it zoned and through to planning.

FYI the short term land bank will also include large sites of 1,000+ homes, and no matter how good you are, you can't build and sell 1,000 houses in 2 years, more like 5-10, so as you start phase 1 you have 800 houses with planning that you dont start until you've finished and sold the first 200.

the land bank also includes sites with just outlying permission to build XXXX number of homes. to get from that through detailed planning permission takes years and £millions


edit to add

look at Taylor Wimpeys 2012 accounts, they had 35k plots with detailed planning, they sold 11k houses in the year, now to build the infrasturcture and houses takes around 18 months (so say 17k plots in construction) so they only really have 15-18k plots with detailed planning that they are not building right now, and that means they only have around around 12-18 months of plots un started. (so for an average plot, they will get planning and then start building 18 months later, not that bad really)

forgot to add to this,

after DETAILED planning permission, you need to do the building regulations technical work, and the highways technical and the utilities technical work, all of which takes months and £XXX,XXX again.

so out of the 18 months unstarted plots you need to take out say 12 months of technical planning time (for a large site)

after that you need to tender the ground works package and guess what, that takes months as well.

so say 3 months for that.

leaves not much of the 18month stock they have...

so really what I am saying, is that the big boys are not sitting on tens of thousands of un started plots with detailed planning just twiddling thier thumbs, they have plots they are building, or doing the technical work on before they start.

vivatifosi

martinsurrey wrote: »

you are confusing strategic land bank with detailed planning permission.

a green fieild site may be in the stategic land bank as 2,000 homes, but it might take 15 years to get it zoned and through to planning.

FYI the short term land bank will also include large sites of 1,000+ homes, and no matter how good you are, you can't build and sell 1,000 houses in 2 years, more like 5-10, so as you start phase 1 you have 800 houses with planning that you dont start until you've finished and sold the first 200.

the land bank also includes sites with just outlying permission to build XXXX number of homes. to get from that through detailed planning permission takes years and £millions by


edit to add

look at Taylor Wimpeys 2012 accounts, they had 35k plots with detailed planning, they sold 11k houses in the year, now to build the infrasturcture and houses takes around 18 months (so say 17k plots in construction) so they only really have 15-18k plots with detailed planning that they are not building right now, and that means they only have around around 12-18 months of plots un started. (so for an average plot, they will get planning and then strat building 18 months later, not that bad really)

I'm not confusing anything. I am merely pointing out the size of the land banks, not commenting on what is inside them. If you read my first post you will see my comment that I think the issue is insufficient land is available for development but that I don't know what the answer is.

However it is clear from the stock of land within the land banks that there's a quite wide variance in how they are used... 4 yrs turnover in one up to practically ten in another. I would want to understand why a company has a land to development multiplier of ten. If it is about planning g, then that's a different issue and solution required to if it is holding on for profit. In one case, streamlining planning could be the answer, in the other tax on unused land per ILWs suggestion would be more appropriate. My interest is purely in seeing more info brought to the table for a more rounded debate.

CLAPTON

Prothet_of_Doom wrote: »

My thoughts: The Building industry is a varied and diverse culture, but the big boys are required to make a "return on investment" and a "Return on Sales" by their sahreholders, who tend to be pension companies and the like. They are also involved in industrial, civil construction on a global scale. In order to maintain that return on sales they just stop building, when the market price is too low. They can do this because they actually employ very few people, and deal with lots of contract workers who are self employed or ltd companies, so they can flex requirements easily.
Whilst there are other smaller companies, these would be forced to follow to remain competitive. So are they manipulating the price, or meeting shareholder requirements to achieve return on sales of a particular figure ?

If the big boys don't build why exactly do the small fellows stop? How are they remaining competitive by not building and making no money?
How is making no money a good thing for either big boys and small companies?

Shareholders are concerned with dividends and share price. No building means no dividends (as has been the cases for the last few years) and a collapse in share price .

ukcarper

Graham_Devon wrote: »

No one has suggested it would be done without cost.

But investment will bring jobs and growth.

More than 350 councils are calling on the government to let them get building homes.

That's significant by anyone's measure. Surely?

.

But it will entail borrowing and that is what the government is against.

Thrugelmir

IveSeenTheLight wrote: »

I found the planning application process very easy and was approved first time within 6 weeks.

That said, I did my homework, considered what concerns may be raised and included plans to answer those concerns (as a result did not have any objections).

Co-ordinating a project to include power, water, drainage, schools, doctors, community centre, shops etc. All takes time. Not least that main contractors aren't sitting around waiting for work.

Days are well gone when building companies had everything inhouse so to speak. Now very high % is subcontracted out.

Last new build I bought (Cala). Only had 2 direct employees on site. That was the site manager and his assistant.