Home Ownership at Lowest Level for 30 Years

davomcdave

GreatApe wrote: »

That's not really close to what happens. Build costs down south are closer to £2k/sqm which would put a 100sqm house build costs at £200k

If you want to build say 100 homes in or near London you will have to do something closer to the following

Assuming affordable land at £50k a plot
£200k build cost per house inc utilities

That is £25m cost for 100 homes so £250k a home right? Wrong

If the development takes a year add 5% for finance so £1.25m there. Add in s106 obligations and fees and CIL fees which could be very significant but probably looking at £3m. Not forgetting planning fees and delays and risk and profit but for now we will ognofre those

So total cost is closer to £30 million for 100 homes. The real problem is that the councils require the developer to give 50% of the homes to the council at a price the council can afford to rent it as social council homes for at £500pm to the asylum seekers or work shy. That probably means selling 50 of your units to the social landlord for £80k a pop.

That gives you £30 million cost minus £4m for selling 50 units to the council. It leaves you with 50 units and £26m cost. Thus you need to sell each of your saleable units for £520k a pop to break even

And remember we only took £50k for the plot of land often it will cost more than that. However even if you could get land for half that price it only Knocks your saleable unit break even price to £470k a pop

And London homes especially in outer London where the space is are not valued at £1m. You are probably looking at half that as more reasonable estimated sale price

Why on earth would you assume land costs 5x the highest price ever paid in one of the more expensive areas around the M25?

You are making my point for me. The house costs £210k or £260k if we use your building cost assumption. The point is that this ridiculousness like s106 and not being able to get planning permission in the first place means houses cost a million quid. It's the process that is broken.

You can buy a house in vast swathes of the US for $250-300k. !!!!!! you can live in a small town by the beach for $300k pretty easily:

http://www.realtor.com/realestateandhomes-detail/Mh141-B-Coral-Dr_Myrtle-Beach_SC_29575_M62031-28328

NC has a GDP per capita of over $44k versus less than $42k for the UK (PPP).

Get rid of the stupid planning laws and more people can buy a house.

ukcarper

davomcdave wrote: »

Why on earth would you assume land costs 5x the highest price ever paid in one of the more expensive areas around the M25?

You are making my point for me. The house costs £210k or £260k if we use your building cost assumption. The point is that this ridiculousness like s106 and not being able to get planning permission in the first place means houses cost a million quid. It's the process that is broken.

You can buy a house in vast swathes of the US for $250-300k. !!!!!! you can live in a small town by the beach for $300k pretty easily:

http://www.realtor.com/realestateandhomes-detail/Mh141-B-Coral-Dr_Myrtle-Beach_SC_29575_M62031-28328

NC has a GDP per capita of over $44k versus less than $42k for the UK (PPP).

Get rid of the stupid planning laws and more people can buy a house.

There probably are to many restrictions on building, but getting rid of planning laws would be a complete disaster.

davomcdave

ukcarper wrote: »

There probably are to many restrictions on building, but getting rid of planning laws would be a complete disaster.

I don't think that we should get rid of planning laws entirely and I'm not sure if/why you think I say we should but the current rules are a farce. A quarter acre of land can be worth £10k (at a record price for a pretty expensive part of not-London) if you grow crops on it or hundreds of thousands of pounds if you can build a house on it. That is a direct measure of the cost of the stupid planning laws that apply to the region around London.

westernpromise

If it were permissible to build houses for £200k that were worth a million the price of the land would rise to £800k, of course.

movilogo

See the other side, gadget ownership is at highest level

GreatApe

davomcdave wrote: »

Why on earth would you assume land costs 5x the highest price ever paid in one of the more expensive areas around the M25?

You are making my point for me. The house costs £210k or £260k if we use your building cost assumption. The point is that this ridiculousness like s106 and not being able to get planning permission in the first place means houses cost a million quid. It's the process that is broken.

You can buy a house in vast swathes of the US for $250-300k. !!!!!! you can live in a small town by the beach for $300k pretty easily:

http://www.realtor.com/realestateandhomes-detail/Mh141-B-Coral-Dr_Myrtle-Beach_SC_29575_M62031-28328

NC has a GDP per capita of over $44k versus less than $42k for the UK (PPP).

Get rid of the stupid planning laws and more people can buy a house.

My point is the land is not the biggest cost. The biggest cost is having to give away half the units at a big loss to the council

Even if the land were free rather than £50k a plot the example I gave above would go from £520k cost a unit to £420k cost a unit. The £420k cost is still a lot higher than your example.

If you want housing in the south to become cheaper you not only need to reduce land prices and make more albd available but more importantly you need to get rid of the 50% requirement for 'affordable homes' which actually ironically makes the 50% of the homes the developer can sell to the market a lot less affordable

davomcdave

GreatApe wrote: »

My point is the land is not the biggest cost. The biggest cost is having to give away half the units at a big loss to the council

Even if the land were free rather than £50k a plot the example I gave above would go from £520k cost a unit to £420k cost a unit. The £420k cost is still a lot higher than your example.

If you want housing in the south to become cheaper you not only need to reduce land prices and make more albd available but more importantly you need to get rid of the 50% requirement for 'affordable homes' which actually ironically makes the 50% of the homes the developer can sell to the market a lot less affordable

In that case we agree. The stupid rules that the British government puts building houses make houses expensive.

ukcarper

davomcdave wrote: »

Why on earth would you assume land costs 5x the highest price ever paid in one of the more expensive areas around the M25?

You are making my point for me. The house costs £210k or £260k if we use your building cost assumption. The point is that this ridiculousness like s106 and not being able to get planning permission in the first place means houses cost a million quid. It's the process that is broken.

You can buy a house in vast swathes of the US for $250-300k. !!!!!! you can live in a small town by the beach for $300k pretty easily:

http://www.realtor.com/realestateandhomes-detail/Mh141-B-Coral-Dr_Myrtle-Beach_SC_29575_M62031-28328

NC has a GDP per capita of over $44k versus less than $42k for the UK (PPP).

Get rid of the stupid planning laws and more people can buy a house.

u

davomcdave wrote: »

I don't think that we should get rid of planning laws entirely and I'm not sure if/why you think I say we should but the current rules are a farce. A quarter acre of land can be worth £10k (at a record price for a pretty expensive part of not-London) if you grow crops on it or hundreds of thousands of pounds if you can build a house on it. That is a direct measure of the cost of the stupid planning laws that apply to the region around London.

Las sentence first quote,

davomcdave

ukcarper wrote: »

u


Las sentence first quote,

We should get rid of the stupid planning laws and replace them with sensible ones.

ukcarper

davomcdave wrote: »

We should get rid of the stupid planning laws and replace them with sensible ones.

Perhaps you would like to elaborate, what stupid and what are sensible.