Planning permission not the hold up to building houses

mwpt

cells wrote: »

you have a choice,

restrict lending in which case ownership levels will fall and maybe prices will be marginally lower and also build rates will be marginally lower

Dont restrict lending and prices will be marginal higher and so will ownership

How do you come to that conclusion? No-one has yet shown the correlation of mortgage lending to build ratios, except in a very sketchy short time period since 2008 which involved the biggest recession since 1930s so really hard to make a definite causation argument. I keep pointing out that increasingly easy money, loose credit since the 90s, definitely didn't result in higher build ratios (at least the last figures I recall seeing). I don't believe we have a problem with mortgage rationing at the moment.

In the absence of sufficient building, easier credit will simply shift asset prices upward until we reach the same unaffordability equilibrium, just at higher prices.

princeofpounds

Do you know anything about finding "hidden" land that I may be able to obtain and build, inside London? Particularly land that may be held by the council on which I could obtain residential planning permission? I'm wondering, with the increased scrutiny on this you may be able to apply some leverage and coerce a sale?

Not quite sure what you mean by this...


London - like all city centres - is a slightly different game, because there it's all about density, change of use and rehabilitating contaminated (in the bureaucratic sense) ground.


No you can't coerce a sale of local authority land. The government is pushing them to sell their real estate assets where possible, but it should be done by open tender.


Unless you try something like this (allegedly):


http://order-order.com/2015/11/05/libdem-council-hand-million-pound-discount-to-mps-firm/

cells

mwpt wrote: »

How do you come to that conclusion? No-one has yet shown the correlation of mortgage lending to build ratios, except in a very sketchy short time period since 2008 which involved the biggest recession since 1930s so really hard to make a definite causation argument. I keep pointing out that increasingly easy money, loose credit since the 90s, definitely didn't result in higher build ratios (at least the last figures I recall seeing). I don't believe we have a problem with mortgage rationing at the moment.

In the absence of sufficient building, easier credit will simply shift asset prices upward until we reach the same unaffordability equilibrium, just at higher prices.

why would you think there is no correlation between the mortgage market and new builds? Look at another market like cars can all the car sellers say there is and that last year was a record year for car sales thanks partly to more easy credit

we have too restrictive a mortgage market,

you could argue any regulatory overburden is too restrictive but in the UK it is resulting in a rapid shift from ownership to rentals. The situation is so silly that France now has more owners than the UK!

the two play together, we need easy mortgages and easy building to allow the uk to go towards 400,000 new builds a year. We cant get there without easy mortgages.

mwpt

princeofpounds wrote: »

Not quite sure what you mean by this...

London - like all city centres - is a slightly different game, because there it's all about density, change of use and rehabilitating contaminated (in the bureaucratic sense) ground.

No you can't coerce a sale of local authority land. The government is pushing them to sell their real estate assets where possible, but it should be done by open tender.

Unless you try something like this (allegedly):

http://order-order.com/2015/11/05/libdem-council-hand-million-pound-discount-to-mps-firm/

No, nothing like that. I just wondered if there was a way to find out if the council was sitting on land suitable for residential development and try to get them to sell it, via open tender or otherwise.

princeofpounds

There was a great little map put together by the DCLG that used to tell you about the sort of things councils owned (it wasn't actually comprehensive, but it was interesting)


https://www.gov.uk/government/news/first-public-property-map-councils-could-save-billions


Unfortunately it seems to have been terminated.

mwpt

cells wrote: »

why would you think there is no correlation between the mortgage market and new builds? Look at another market like cars can all the car sellers say there is and that last year was a record year for car sales thanks partly to more easy credit

Yes, I'll revise my statement. There may be correlation and I can see how credit can fund development, but please explain low building ratios since 90s in a period of very loose lending.

we have too restrictive a mortgage market,

No, we have a range of products available at extremely cheap credit costs. Lending multiple are not stricter than in past periods of higher building rates.

If you make more credit available at cheaper prices, asset prices will shift upward and we'll end up with the same problem, just more risk.

michaels

cells wrote: »

why would you think there is no correlation between the mortgage market and new builds? Look at another market like cars can all the car sellers say there is and that last year was a record year for car sales thanks partly to more easy credit

we have too restrictive a mortgage market,

you could argue any regulatory overburden is too restrictive but in the UK it is resulting in a rapid shift from ownership to rentals. The situation is so silly that France now has more owners than the UK!

the two play together, we need easy mortgages and easy building to allow the uk to go towards 400,000 new builds a year. We cant get there without easy mortgages.

Given the supply restrictions won't increasing effective demand merely push up the value of any piece of land on which planning permission is grantd rather than lead to more supply being brought forward - for a landowner in the SE getting planning permission is already the equivalent of winning the lottery - increasing the lottery payout by 10% is not going to tempt people with land that might get permisson from applying.

Untill the value of land with and without planning permission equalises (perhaps this is the case in some areas with low house prices already?) then the case is proved that planning permission is constraining the supply of housing.

cells

mwpt wrote: »

Yes, I'll revise my statement. There may be correlation and I can see how credit can fund development, but please explain low building ratios since 90s in a period of very loose lending.

there was not low building in the 1990s the uk arguably had an excess of homes in the 1990s (London definitely had an excess of homes in the early 1990s)

The tide started to turn somewhere around 2004 when population boomed so build rates had to go up. The building industry did actually increase building from 2004-2007 but then the recession hit and mortgages were rationed which combined resulted in a crash in new builds

mwpt wrote: »

No, we have a range of products available at extremely cheap credit costs. Lending multiple are not stricter than in past periods of higher building rates.

Things are better but 10% down mortgages spreads should not be as high as they are they should be closer to 25% down mortgage spreads.

Also it is not the price that is limiting buyers it is the criteria. Lets say there is lots of food and its cheap but if your name is bob you are not allowed to buy any. well there is a shortage of food for bob and he will starve.

There needs to be a return of interest only and a return of self cert for anyone putting 20% down (by that i mean just ticking a box labelled 'i am confident i can service this mortgage', rather than fake pay slips).

mwpt wrote: »

If you make more credit available at cheaper prices, asset prices will shift upward and we'll end up with the same problem, just more risk.

why dont we do the opposite? why dont we make getting mortgages even harder? prices will fall a bit and we will end up with less risk according to you. Its all correct but the net result will be fewer people can buy so the owner pool will shrink

simply.
more rationed mortgages = less owners
less rationed mortgages = more owners

cells

michaels wrote: »

Given the supply restrictions won't increasing effective demand merely push up the value of any piece of land on which planning permission is grantd rather than lead to more supply being brought forward - for a landowner in the SE getting planning permission is already the equivalent of winning the lottery - increasing the lottery payout by 10% is not going to tempt people with land that might get permisson from applying.

Untill the value of land with and without planning permission equalises (perhaps this is the case in some areas with low house prices already?) then the case is proved that planning permission is constraining the supply of housing.

its a little more complicated than that. on smaller plots its not much of a lottery win as the council has eyed the lotto wins and decided to take some/all of it

for instance in London you need to give away half the builds to the council at a rate the council can afford to let it out for nowt. you need to also on top of that contribute various bribes and fees like the CIL

I have one plot which got planning permission in 2007 and it simply was not economic to build and it lapsed 3 years later. It now is becoming economic with higher prices and maybe I might put in another application and go forward with it. were prices a higher a couple of years ago maybe I would have bought it to market a couple of years sooner. but I am still very reluctant to even go through it again its only one house and the council wants tens of thousands in bribes and add to the fact its going to devalue the house next door and its a bit complicated. But of course at some price point it will be worth it just now its a bit marginal all things considered (also the cost of the bribes and regs tends to go up with increasing prices which does not help eg for a short time I was exempt from the bribes thanks to the conservatives but some council somewhere overturned that and now councils can again seek their bribes even for a 1 off build of one house)

wotsthat

mwpt wrote: »

If you make more credit available at cheaper prices, asset prices will shift upward and we'll end up with the same problem, just more risk.

When prices fell in 2008, mortgages dried up and better off people were able to buy cheap houses and rent them out to the people who could've bought the same house themselves a few short months before.

The cheerleaders for credit restriction didn't realise that it's a mechanism for a transfer of wealth from poor to rich.

Not knocking it mind - it's how I managed to get a second home - nice deposit in the bank, great credit history and the riff-raff couldn't get a mortgage so didn't bid up prices.

Feel free to keep campaigning - I'm on the lookout for a bigger place.