Why can't the UK build 240,000 houses a year?

cells

Carl31 wrote: »

why dont councils build anymore? surely this is a big part of the problem, and the solution the government can control easiest?

afaik the councils never built homes, they tendered the building out to private contractors and house builders

so the question is, why don't the councils tender out more building

the answer is simple, a council sets what it thinks are the needs. eg they may say 5000 homes over the next decade and then try try to give out about 500 stamps a year and the builders build 500 homes a year give or take

if the council tendered out say 2,000 homes to be built by "itself" over the next 10 years...well its still set a cap of 5,000 homes over the next ten years. so it would just give out 2,000 fewer stamps and 2,000 fewer privately built homes will be built


so no additional homes will be built while they keep the same cap. but if they were to increase the cap the private builders would build anyway

cells

kabayiri wrote: »

8. The consequences of not hitting the target are NIL.

Because of this we get political soundbites "to show something is being done" without any real expectation of measuring against target.

Some would call it incompetent management if you translated the procurement target into a different area / company which depended on it.

If your livelihood depends on it, you find a way.

as a nation our livelihood depends on house building to some extent

if the UK built 400,000 homes a year instead of 130,000 a year the difference of 270,000 homes a year would be a huge boost to jobs and taxes

I would estimate some £70B in GDP per year is lost due to the gross under building of homes in the uk. That represents some 1.5 million direct and indirect jobs and perhaps £30B or so in additional tax receipts and the social and monetary cost of 1.5m fewer people on the dole and unemployed and depressed

also the vast majority of those jobs would be manual manufacturing jobs which imo are a little more important to create than other jobs (as some people are only able to do and hold manual jobs)

cells

Blacklight wrote: »

It's very straightforward. Why can't widget producers generate massive oversupply to reduce the price of widgets? They will obviously only produce what's needed to keep the price where they want it (a la opec).

The last time I pointed this out though someone said it wasn't correct because loads of smaller widget makers would obviously undercut everyone, meaning the big players had to drop their prices. Well where are they then?

it is very hard to form a cartel not to mention illegal

if it was at all possible or easy you would never find failed businesses, why dont all the small shop keepers get together and sell you bread for £5 a loaf and milk for £3 a litre?

lots of small players in an industry fight each other like mad and push margins to the limit until some sustainable low margin footing is found.


housing would act like retail, its small and simple enough that there would and could be thousands of builders building a few dozen homes each per year and a few bigger builders doing the larger 500+ home sites.


also your theory doesn't hold in france where they often build around 400,000 each and every year. material prices are v.similar so is labour yet they manage just fine building a reasonable supply.

theEnd

cells wrote: »

there is no realistic way to reallocate housing in that manner and nor should the state or society take from those older people who bought and want to stay in their larger homes.

A proper property tax would help 'encourage' people to downsize.

cells wrote: »

plus the most important factor is occupancy rate and most people, including yourself, don't really understand it. we dont need more homes for immigrants we need more homes for the people in the UK

eg there was a period in the uk between 1974-1983 where the population was flat at 56.25 million. ie zero population growth. so a lot of people would think wrongly...no population growth no need for more homes...the reality was that during that time of zero populaion growth the uk added more than 2.5m additional homes.

The result was that during those 9 years the ocupancy rate fell, as it has done for a hundred years in vertually all countries in the world


The same needs to happen, the uk ocupancy rate is currently about 2.35 it has to head down towards 2.10 and even lower

That means even if the population was flat at 65m for a decade we would still need to build 3.2 million homes to get the ocupancy rate down. the same as was needed and happened in the 1970s (as well as 1960s 1950s 1980s etc)

Would this largely be negated by changes in capacity? The house I live in would have been 1 home with a occupancy rate of maybe 5.0 in the 70s. Now it's 4 flats with an average occupancy rate of 1.2. Same number of people in the same space.

cells

theEnd wrote: »

A proper property tax would help 'encourage' people to downsize.


Would this largely be negated by changes in capacity? The house I live in would have been 1 home with a occupancy rate of maybe 5.0 in the 70s. Now it's 4 flats with an average occupancy rate of 1.2. Same number of people in the same space.

there is already a tax in the form of higher council tax, and in the form of higher heating bills and maintenance. any additional tax which is charged on single occupancy homes will not fly the 10 million or so people who live alone will vote you out. suggesting solutions like that is a total waste of time its even worse than that its an excuse to do nothing.

as for larger homes being split into multiple flats, that is in the new build data. eg if 1 large home is converted to 4 small flats it shows up as +3 homes (4 flats minus 1 home). so the occupancy rate figures take into account that


in short it is simple, the occupancy rate needs to fall towards 2.1 and maybe even lower towards 2.0

to achieve that we need to build 400,000 homes a year every year for many many years to come.

daveyjp

cells wrote: »

It is as simple as that but you need to ask why it is the cost of construction is so vastly different in different parts of the country.

for example, in Telford they are building a lot of new homes and plan to do so for the next 20 years. About 1,000 homes a year, if you scale telfords population to that of the UK it would be equal to the uk building 380,000 homes a year. Prices are much cheaper than almost everywhere else in England yet the builders are able to build at a per capita rate that is 3x higher than the national average

The cost of materials is the same in Telford as elsewhere in England, labour is also virtually the same as most places in England. The only difference between a place like telford is that the local council is pro building and they have set a good ample target and try to meet it. as a result development land is ample and its price affordable and the output new built homes are sold at a far lower price than new builds elsewhere in england

You are looking at the wrong end of the equation. Labour and material costs aren't much different around the Country, what is different is the price you can sell a new house for.

If the end value of the house doesn't cover ALL costs incurred in developing it it won't get built.

theEnd

cells wrote: »

as for larger homes being split into multiple flats, that is in the new build data. eg if 1 large home is converted to 4 small flats it shows up as +3 homes (4 flats minus 1 home). so the occupancy rate figures take into account that

You sure? In my example the occupancy rate fell from 5 to 1.2, but nothing fundamentally changed, other than splitting of a house. The new build numbers are irrelevant.

Average size per home would be a better indication. Say in my example, in 1970, 5 people lived in 250sqm, now 4 sets of 1.2 people live in 62.5sqm.

Your occupancy rate has collapsed, but the need for actual new housing doesn't exist.

Aura

We got a lot of old buildings that would make ideal living accommodation if done up, but they are just left to fall down which is a shame.

Blacklight

cells wrote: »

it is very hard to form a cartel not to mention illegal

if it was at all possible or easy you would never find failed businesses, why dont all the small shop keepers get together and sell you bread for £5 a loaf and milk for £3 a litre?

lots of small players in an industry fight each other like mad and push margins to the limit until some sustainable low margin footing is found.


housing would act like retail, its small and simple enough that there would and could be thousands of builders building a few dozen homes each per year and a few bigger builders doing the larger 500+ home sites.


also your theory doesn't hold in france where they often build around 400,000 each and every year. material prices are v.similar so is labour yet they manage just fine building a reasonable supply.

No-one said anything about Cartels. I think you're missing the point. It's not about anyone fixing an artificially high price, it's about everyone naturally selling at a price everyone knows people will pay and maximising margins.

Why would everyone do that? Why wouldn't smaller outfits sell at a much lower reduced price and undercut the big boys? ...because they're not bloody stupid and it's development of houses and not a loaf of bread we're talking about.

I won't even start commenting on the France analogy.

CLAPTON

Blacklight wrote: »

No-one said anything about Cartels. I think you're missing the point. It's not about anyone fixing an artificially high price, it's about everyone naturally selling at a price everyone knows people will pay and maximising margins.

Why would everyone do that? Why wouldn't smaller outfits sell at a much lower reduced price and undercut the big boys? ...because they're not bloody stupid and it's development of houses and not a loaf of bread we're talking about.

I won't even start commenting on the France analogy.

what exactly is the difference between selling houses and selling bread?

there are probably fewer large bread makers than large builders.

naturally a company will wish to charge as high a price as possible (i.e. that will sell) for any product
however if the profits are high due to high prices, then new entrant will be willing to sell for lower prices in exchange for higher volumes


low prices and high volumes often make more profit that high prices and lower sales

no different to any other market except of course, the supply of land and planning permission is controlled artificially by the state.