Why prop up the new build market instead of the ENTIRE property market??

Mickey666

AdrianC said:

Mickey666 said:
but you've missed the point that princeofpounds was making (and I was agreeing with) that it's only developers who have the resources to navigate, nay force, their way through the complex and restrictive planning bureaucracy - something that the average self-builder could not even begin to contemplate.

Yes, they can. Of course they can.
They may find it easier to hire a planning consultant - I did when we were building a garage. He charged me a few hundred quid.
Building a garage on an exiting residential plot isn't even a close comparison with getting PP on a green field site.


So why didn't the landowner simply do that themselves?
As you say, they paid for the costs of doing it...
Yes, but only AFTER the land development company had spent THEIR resources on getting PP and the land sold on at a hugely inflated price.   Sure, the landowner could do it themselves if they had £300k+ going spare, but you try borrowing that amount secured only on a 10 acre field worth maybe £30k at agricultural prices.

I know someone who had a 5-bed detached house built for around £120k about 15 years ago (excluding the land price) - and not a pokey 'developer new build' either.  I also know a young couple who are currently building a large 4-bed house in an acre of land, this time by themselves using friends and acquaintances in the building trade.  They reckon it will come in at well under £100k, which in this case includes the land as they've got consent to build on their family farm, but even at another £100k for the land that's still only £200k for a large family home in an acre.  They'll probably be mortgage free by their mid-30s.
Houses are cheap to build, it's all the bureaucracy and effective developer monopoly that makes them expensive to buy.

Anybody who has ever contemplated an extension says "cobblers" to that.
Not if they build it themselves.

Even if you completely ignore the substantial cost of labour in building the property, the materials and equipment are far from cheap.

What's the usual extension rule-of-thumb? £1k/m2...
Hold on - this reckons that's way out of date, and now £1,100-1,400. Plus vat, but that's reclaimable on a new-build.
https://www.mybuilder.com/pricing-guides/house-extension-costs

Those 'rules of thumb' are just that and have all manner of builders profits and overheads built in.  Besides, extensions are small 'retail' jobs and do not scale up linearly to a larger 'wholesale' projects.  I can hire a digger for £250 a week and that would be enough to dig the footings for your extension or a large 5-bed house.  Might need another concrete truck (£500?) or two but that's about the only difference.  You might buy a 1-ton 'big bag' of sand from Jewson for £80-90, but 25 tons of sand from the same local quarry will be around £550.    Even I've managed to get 60% off building materials by buying enough to be delivered direct and not through the builders merchant.  I've also completely re-roofed around 120m2 of outbuildings from scratch using nothing more than a truck load of treated timber and a young, newly qualified carpenter - took less than one month and cost around £5k (we re-used most of the roof tiles).  Building is cheap if you can strip away the overheads and builder profits.

But of course, such 'rules of thumb' set expectations that the building industry can then use to their advantage to keep house prices high.  Fact is, a 300m2 house does not cost twice as much to build as a 150m2 house.

AdrianC

So now everybody should take twelve months off their job, and actually do the construction of their home themselves, because otherwise you're simply padding builders' profits...

I do hope you aren't paying other people to dig or transport that sand, but you're doing it yourself.

princeofpounds

AdrianC said:

princeofpounds said:

AdrianC said:

Now look at population densities. BTW, Germany has about 50% home ownership.

Population density of the UK - 275 people/sqkm. Germany 240, France is lower at 120, Belgium and the Netherlands higher at 380 and 511 respective. England specifically is 475, but just picking England would be like just picking, I don't know, Ile-de-France in France (1022 in case you were wondering).

The density issue is a bit of a myth. 

No, picking the home counties would be like picking Ile-de-France.

The Ile-de-France wasn't intended to be an precise comparison - that's why I put the 'I don't know' qualifier in front of it. I was just pointing out that the UK is not a particular outlier in terms of population density within the sample set I'm discussing. Because it simply isn't. It's not even an outlier if you do cut away huge rural areas of Scotland and Wales and only count England; it's still only similar in density to Belgium or the Netherlands, both of which have vastly superior housing stock being developed.

You can't fairly compare the home counties to Belgium or the Netherlands. They are smaller countries and of a somewhat comparable size in terms of order of magnitude at least, but they still have very rural areas that you are conveniently discounting if you select just the home counties. 

I'll repeat - population density being a barrier to better development is just a myth. We have tons of land even in the South-East where we could build quality homes, rather than force them into Persimmon's battery farm houses.

AdrianC

Why can't you compare 18m people with 18m people? It seems fairly obvious to me that 18m people living in 17,000km2 is denser than 18m people living in 34,000km2 or 41,000km2.

Perhaps the answer as to why we shouldn't compare them is that it's simply a bit inconvenient for your logic?

(FWIW, for "home counties", I used the totals of Greater London plus all directly adjoining counties - taking you quite a long way into rural East Anglia and all the coast from Harwich to Hayling Island - but nowhere that wasn't directly adjoining - so, in other places as close as 11 miles out from the M25.)

Mickey666

AdrianC said:

So now everybody should take twelve months off their job, and actually do the construction of their home themselves, because otherwise you're simply padding builders' profits...

I do hope you aren't paying other people to dig or transport that sand, but you're doing it yourself.

I'm just pointing out the possibilities.  Plenty of people build their own homes instead of moping around moaning about how difficult it is to get on the housing ladder because everything is too expensive.
As for taking a year out of their job, I appreciate your sarcasm but it could make perfect financial sense for some people if you consider what they would earn in a year compared to how much they could save on buying a house.  In fact, building houses could BE their job if they wish - and think of the tax advantages.  Self-build a house for, say £200k then sell it on for, say, £400k completely tax-free if it is your own home.  £200k in the bank for less than a year's work - not too shabby
Of course, while these (and your) examples are all a bit extreme, they nevertheless show that there are many options within those extremes to cherry pick according to individual needs and inclinations.

Conventional thinking stifles creativity when it's exactly what's needed when things get tough.  There may not be easy solutions to the problems many people face in today's economy but there are solutions if people are willing to open their minds and go against the flow.  As George Bernard Shaw once said "The reasonable man adapts himself to the world; the unreasonable man persists in trying to adapt the world to himself.  Therefore all progress depends on the unreasonable man"

As for the sand, it would of course be even cheaper if I dug and transported it myself, but I figure that £500-ish delivered is a fair price for 25 tons of the stuff

AdrianC

Mickey666 said:

AdrianC said:

So now everybody should take twelve months off their job, and actually do the construction of their home themselves, because otherwise you're simply padding builders' profits...

I do hope you aren't paying other people to dig or transport that sand, but you're doing it yourself.

I'm just pointing out the possibilities.  Plenty of people build their own homes instead of moping around moaning about how difficult it is to get on the housing ladder because everything is too expensive.
As for taking a year out of their job, I appreciate your sarcasm but it could make perfect financial sense for some people if you consider what they would earn in a year compared to how much they could save on buying a house.

And how will they repay their mortgages during that time? Y'know, the mortgages they need to repay in order to live in the house they haven't actually built yet.

In fact, building houses could BE their job if they wish

But in your utopia, nobody's going to pay anybody else to build anything for them, just DIY. So they won't have any customers.

princeofpounds

AdrianC said:

Why can't you compare 18m people with 18m people? It seems fairly obvious to me that 18m people living in 17,000km2 is denser than 18m people living in 34,000km2 or 41,000km2.

Because the 18m people in the home counties are sitting in a higher part of the population density curve in their respective country than those in the Netherlands. Or, to put it another way, you're adding in lots of extra low-population density land in the Netherlands to get comparable absolute numbers of population and you simply don't credit the UK in the same way, thereby building into your assumptions what you are attempting to demonstrate.

This is a statistical fallacy because you are comparing an entire population (that of the Netherlands) to a subset sample (the Home Counties) of a population (the UK) that has already been selected for higher density. And the larger in size discrepancy between the two populations the more exaggerated this effect will become.

It's similar to noting that the top 1% of the wage distribution in China starts $105k p.a per capita. This is 15m people. That's not very different to the Netherlands with 17m people and an average wage of $50k. And then trying to compare poverty in the two counties on the basis of those figures (2017 figures but the precise numbers aren't important). Obviously that's a silly example no-one would argue, but by taking it to an extreme case exposes the fallacy.

If you wanted to compare the home counties to a similar area in the Netherlands, you would need to select a similar subset and then scale it up to an equivalent size if you wanted to compare population numbers directly. You obviously don't have to do that if you compare density numbers directly, as it's already incorporated in that ratio.

But as an example you could do worse than using the Dutch Randstat (https://en.wikipedia.org/wiki/File:Randstad_with_scale.png) which has a population density of 1500/sqkm and a population of 8m. I'm not claiming this is a perfect parallel, but it is a more comparable subset (the Home Counties is ~30% of the population of England and the Randstat ~40% of the Netherlands, both towards the denser end of the spectrum no doubt).

AdrianC

Fine. Let's ignore NL/BE and simply compare the home counties with IdF and NRW instead...

moneysavinghero

I'll repeat - population density being a barrier to better development is just a myth. We have tons of land even in the South-East where we could build quality homes, rather than force them into Persimmon's battery farm houses.

But people also like to eat. Yes you can cover all of the available land in houses, but then you can't use that land for growing food. Generally more houses is an indication of a growing population and therefore a growing demand for food. So at the same time as you are removing land for food production you are increasing the need for food. Not sustainable in the long term.

BikingBud

moneysavinghero said:

I'll repeat - population density being a barrier to better development is just a myth. We have tons of land even in the South-East where we could build quality homes, rather than force them into Persimmon's battery farm houses.

But people also like to eat. Yes you can cover all of the available land in houses, but then you can't use that land for growing food. Generally more houses is an indication of a growing population and therefore a growing demand for food. So at the same time as you are removing land for food production you are increasing the need for food. Not sustainable in the long term.

Is that the same form of unsustainable to that we see for house price increases or a different type of un-sustainability?