Should suburban densification be part of the solution to the housing shortage?

michaels

So locally we have seen a lot of brownfield (ish) land converted into housing, for example the station carpark became a multi-storey with houses on top, the local FE college consolidated onto a single site and the old site was converted to flats and town houses, an unused print-works became an urban square with townhouses, offices above shops on the high street have become flats etc.

However this has all been in the town and close to the station. Most of the town (by area) is pre-war suburban semis and detached houses with 'decent' gardens. My thought was given these streets are already semi-urban and have infrastructure, could housing density be increased in this area rather than by building new streets into the surrounding green belt. Options such as HMO and conversion of houses to flats don't really suit the demographic (families and empty-nesters) nor make economic sense.

And I came across this report:
Transforming Suburbia
PDF


Which has some to me interesting ideas on how suburban density could be increased. Even a small percent increase would add a lot of homes. Examples include using the shared drive between semis to access end of garden bungalows and replacing existing semis with garden flats and duplexes above or pairs of semis with terraces of 3 homes. Personally I don't like the appearance of the replacement properties but the idea of adding bungalows to the end of existing gardens has a lot to be said for it.

Does this make sense to anyone?

michaels

Bungalows in back gardens are OK but the street scene should be preserved

How can I fix the typos in the poll?

Thrugelmir

Redevelopment of town centres would be a start. Making them living breathing places. Rather than soulless destinations once the retail shops close for the day. Living close to work would be beneficial to many. No commuting costs. Nor wasted time.

GreatApe

But we have no housing problem in the majority of the country.

Secondly if you want truly low price housing you need to do a mass build of identical or near identical builds on unbuilt land and do it quickly.

Using the idea of building on the back of semis presents some problems. The first of which is that you devalue the existing property which now has a much smaller garden and less privacy. You need to compensate the existing semi owner or said person will take into account that their £300k semi is now worth £270k. So what might look like free land actually costs £30k a plot in this example.

I have a house with PP for a new build on the side. I've done nothing with it primarily because it would devalue the existing house by maybe £100,000. Not to mention the additional tens of thousands of pounds that would be demanded in CIL payments and s106 contributions. So what might appear as a free plot of land has something like a £150,000 cost before you lay a brick

michaels

Bungalows in back gardens are OK but the street scene should be preserved

I am talking London and SE. Locally just outside M25, unimproved semi is 600k, with a smaller garden perhaps 550k whereas 1 new 3 bed detached property = at least 700k.

So 2 homeowners lose 50k each, build cost 150k, net gain 450k. So plot with planning permission might be worth 400k leaving 150k profit for the builder and 150k each profit for those giving up their gardens after subtracting the 50k loss in value.

The report has costings.

kabayiri

I believe that David Essex had the answer

https://youtu.be/FnjUXJqK1qg

GreatApe

michaels wrote: »

I am talking London and SE. Locally just outside M25, unimproved semi is 600k, with a smaller garden perhaps 550k whereas 1 new 3 bed detached property = at least 700k.

So 2 homeowners lose 50k each, build cost 150k, net gain 450k. So plot with planning permission might be worth 400k leaving 150k profit for the builder and 150k each profit for those giving up their gardens after subtracting the 50k loss in value.

The report has costings.

Believe me building new homes in this country is expensive there are lots of commitments and additional burdens. We have some of the highest house prices in the world yet our builders do not have crazy monopoly margins. Apple has far higher margins than house builders in London so think of how difficult it is for house builders in stoke on Trent and the other very cheap parts of the country.

You also have lots of other problems, in that how do you get two different owners of semi houses to both agree at the same time to fund the new build project. If one does not want then its a no go.

Ask yourself honestly, say you owned a semi and your brother owned a semi on the other side so you both combined own the road in between.

1: do you really want the hassel and do you have the skills or desire or funnds to manage a new build project.
2: If someone has to buy you out how much do they need to compensate you to leave your house and move into another
3: you will price in the inconvenience
4: your neibors will be !!!!ed off, imagine it was the semi pair a couple of streets down you simply would not want flats which are likely to house renters or poorer people. You would not want the additional cars or people on the street. It devalues the whole street not a lot but some.


Also single builds cost a lot more than people imagine, this should be clear its a bespoke build done by people with no experience of building that exact house.

GreatApe

michaels wrote: »

I am talking London and SE. Locally just outside M25, unimproved semi is 600k, with a smaller garden perhaps 550k whereas 1 new 3 bed detached property = at least 700k.

So 2 homeowners lose 50k each, build cost 150k, net gain 450k. So plot with planning permission might be worth 400k leaving 150k profit for the builder and 150k each profit for those giving up their gardens after subtracting the 50k loss in value.

The report has costings.

My plot is in Zone 3 London as a guess the current figures are roughly as follows

Existing house £550k

New house cost to build:
£100k devaluation of existing house
£50k contributions to the council for CIL S106
£250k cost to build (£2k/sqm)
£20k lost interest/dividend returns on capital tied up for a year
£5k lost in compensating the tenants to live near a building site for a year (via rent reduction)
£5k various legals to split the land etc

So somewhere in the region of £430,000 while the new build house might fetch £600,000 so a possible profit of £160,000 after sales fees


£160,000 profit does not sound bad on sales of £600,000 its a 26-27% net margin.

But you would also need to take into account my own time
The fact that it is not risk free
The fact that budgets can easily overrun
The fact that builds can easily overrun and each additional year it takes costs £20k in lost return on the capital invested
In fact these are almost guaranteed in a single build I do not know anyone who has not over run their budget or time frame in large refurbishments or new builds

This is an end of terrace. If it were building a house in between two semis so as to turn them all into a terrace or if it was building a bungalow behind two semis then you are devaluing 2 homes in the process rather than one so its even worse


BTW I am not saying this is impossible, I almost purchased a bungalow this year in the SE with the idea of adding 3 more to the back. Unfortunately it fell though. That would have been possible as it has a huge back garden almost 300 ft in length so it could take 3 additional homes. But for a normal semi where each one effectively only takes half an additional home its unlikely to be viable or possible in a lot of places.

It makes more sense for the council to complusary purchase some areas and rebuild more densely. There is a road not far from me which has 7 pairs of semis its ideal to be bought and knocked down and rebuild as perhaps as many as 100 flats. Its a way to add many more units but these wont be cheap. To purchase those 7 pairs of semis and compensate the owners might cost as much as £6 million. So in effect the council would be purchasing 100 plots for £6 million or £60k a plot. In that particular location the flats might sell for £200k a unit so the land would cost the council 30% of the sale price which is not cheap

michaels

Bungalows in back gardens are OK but the street scene should be preserved

Do you have to pay the council contribution for a single property - I thought it only applied for 5+ properties?

I thought build cost might only be 1500 £/sqm as you could piggy back on the existing utilities.

I am not advocating flats/HMOs as in most suburban streets of this nature it is family homes that are in demand.

We have a 110 foot garden which is not atypical for the area so even loosing half leaves a decent garden so the impact on the value is probably more likely 10% than 20% especially if the new property is a bungalow so no overlooking of the garden.

If there is £150k profit in the deal for each of the two semis impacted (from selling the plot, not the developer profit) then they might decide to take the money and if they don't like the loss of garden simply move to an equivalent property that has not had the garden developed, even after moving costs they are still £100k in pocket better off. ?(This already often happens locally where another property an be added onto a detached property garden, the detached owner sells the house and the plot and moves elsewhere trousering the huge gain)

GreatApe

michaels wrote: »

Do you have to pay the council contribution for a single property - I thought it only applied for 5+ properties?

I think it was 10+ properties
When I last checked there was recently a court case where the council won which meant they could and would charge for those developments of fewer than 10 properties all the way down to 1. The biggest problem/hit was that half of the development had to be for social rent which effectively means having to sell half the units at a loss which means the half you have left ends up being very expensive. It is how berkley a London developer has prices north of £1 million yet only manages profits of about 20% it means its literally costing them £800,000 to build a 3 bedroom flat.

I thought build cost might only be 1500 £/sqm as you could piggy back on the existing utilities.

Gas/Eletricity/Water connection is not that expensive. But a bespoke 1 off build means inexperience and mistakes which take a lot of time and add costs.

We have a 110 foot garden which is not atypical for the area so even loosing half leaves a decent garden so the impact on the value is probably more likely 10% than 20% especially if the new property is a bungalow so no overlooking of the garden.

You need at least 21 meters which is what about 70 feet. 8 meters in depth for the bengalow 5 meters small garden at the back and 5 meters small parking space at the front and a 3 meters road for the vehicle.

So you are going to lose 70 of your 110 foot garden = 63% of it

Oh !!!! I forgot something crazy, Do you know how expensive a wall is?
Just a brick garden wall? When I was costing one it was shocking. You are looking at a cost of £200 per meter.

So lets say you put a 2 meter high wall around the preterm of your garden. So your garden is about 35 meters long by say 10 meters wide. You need 80 meters of wall = £16,000.....sixteen thousand pounds!

And a drive to the new bungalow at the end of the garden? 3 meters wide going back say 25 meters from the front of your house = 75 square meters plus 10 meters by 3 meters in front of the new bungalow = 30 square meters. Say 100 square meters with a decent brick drive. That is about £15,000 there

So you already have a ~£30,000 cost to just build the garden walls and drive to your bungalow.

Oh and of course you have actually lost a lot more of your garden as the bungalow eats 3 meters into the garden for the driveway. So thats another 30% of your garden lost. You are only left with about 25% of your origional garden to yourself. You also need more garden walls than this to not just go around your existing garden perimeter but to make a new perimeter for your much smaller garden. So about £8k more for your semis new garden walls too.

The bungalow would also be small, you are looking at no wider than you own semi and probably not much more deep than 8 meters so somewhere around 70 square meters. A 2 bed really.

Add splitting the land into two tittles and planning applications and you have sunk £40k before you lay a brick on the actual new bungalow

GreatApe

michaels wrote: »

If there is £150k profit in the deal for each of the two semis impacted (from selling the plot, not the developer profit) then they might decide to take the money and if they don't like the loss of garden simply move to an equivalent property that has not had the garden developed, even after moving costs they are still £100k in pocket better off. ?

To add one bungalow to the end of two semis would be very difficult. If you could add two it might be possible

You are looking at £15-£20k for the access road to the bungalow
You are looking at £20k for brick the walls around the new boundaries

You are taking 75% of the existing garden away from the existing house and thus devaluing the existing semis. And it is not just about the garden its the fact of having another 1-2 houses at the end of your garden.

(This already often happens locally where another property an be added onto a detached property garden, the detached owner sells the house and the plot and moves elsewhere trousering the huge gain)

It is possible if you can add a lot of homes to the back. A house not far away from me sold for £1 million recently while its market value was probably £600k maybe a bit higher. So the owner trousered ~£400k from being able to get planning permission (minus moving costs so perhaps really only ~£350k). But that was for 9 detached homes plus two semis at the back as he had a MASSIVE back garden.

Just adding 1 house to the side or back can be profitable but in much of the country it would not be viable