Thursday, June 14, 2007

Sir Ming's Madcap Scheme

Sir Menzies Campbell has again proved his unfitness for office by coming up with a madcap scheme to build one million houses for social housing over the next ten years. He would do this by getting councils to buy land from farmers, grant themselves planning permission and then sell the land on to property developers at a huge profit. Quite astonishing in its naivety. What self-respecting farmer is going to sell land at a knockdown price to a council in the full knowledge that he's being diddled?

The Country Land and Business Association has described Sir Ming's scheme as "completely divorced from reality". President David Fursdon said the system was "open to so much abuse" as councils would be deciding whether to grant permission for schemes that would make them huge sums of money. "And why is it that it's OK for the local authority to do something on the land when it's not for the private landowner?" he asked. Quite.

More from BBC News Online HERE.

UPDATE: LibDem activist Norfolk Blogger says IAIN DALE IS RIGHT. Hold the front page!

65 comments:

Anonymous said...

Sounds like another 'Let's f00k the farmers' scheme to me.

Letterman said...

You are correct he is a mentalist.

Anonymous said...

Spatial planning is now decided by Regional Assemblies (e.g. EERA) and Government offices of the regions (e.g. GO-East) in concert with Whitehall. Local authorities are told what to build and where.

The lobbying for major housing building does not happen at district council level but in the corridors of Westminster.

Witness the proposals for Harlow in the East of England Plan. A scheme for the BP pension fund to build up to 25,000 house was rejected at the public enquiry stage only to be reinstated by the Government. This pension fund will make billions of pounds if the scheme succeeds

The Lib Dems seem to be a little behind the game here.

Jock Coats said...

They have to be fair consistently campaigned against spatial planning being taken away from local authorities. And the BBC did a bad job explaining Community Land Auctions in that article.

Anonymous said...

'Country Land and Business Association are against it'

they dont like it up em.

Jock Coats said...

Incidentally, anon @ 13:32,

How would you describe it when a farmer gets a several hundred times uplift just because a bunch of councillors say so? Is that not "let's f00k everyone else"?

Theo Spark said...

If they want the land they pay full whack.

Chris Paul said...

The man is gaga. Apart from anything else with major housebuilders declaring profits of 50% of turnover (I kid you not) they'd be better off building the things themselves.

And isn't the plan to build 200,000 per annum anyway? Without diddling any farmers.

Ed said...

There would be no "problem" to "solve" with statist confiscatory measures if:

- local authorities were allowed to set their own planning policy
- local authorities were allowed to tax land/property values

Chris Paul said...

Sell such land with an uplift clause following OPP and another for FPP or build in a profit share.

I have done this with a charity I work for. We sold the building and land to a developer. We get an element of the development when it is built out. Plus we get a share in any super profits.

anyonebutgordon said...

Hi Ming
An even better idea - why not go somewhere where they property values are sky high e.g Kensington & Chelsea, Knightsbridge, The Bishops Avenue and Sandbanks in Poole.
Get the council to compulsarily purchase the lot at knockdown prices (the owners will moan, but who cares their rich and they don't vote LibDem do they?). Build lots of executive aparments in prime locations with some social housing and the councils will make a absolute fortune.
You idiot. I think you've been an MP for too long. Time to mix with ordinary people for a change?

Jock Coats said...

Incidentally, before you silly Tories get too ahead of yourselves on this, I understand that Michael Gove is also in favour of Community Land Auctions, and has recently spoken at an event alongside Ed Davey in favour of them. (ie as well as and separately from Community Land Trusts - a very different proposal which he also supports).

Jock Coats said...

And Chris Paul @ 13:52,

Barratt 15%, Persimmon 18.5%, which major housebuilders are you saying have reported 50% profits?

mitch said...

how about a law is passed taking land off mps that exceed say 10 acres and build on that,no cost and truely selfless like they tell us they are.extend this to nuke stations to see how safe they realy are.All mps would become IMBY s.listen to them piggs squeal.

CCTV said...

What self-respecting farmer is going to sell land at a knockdown price to a council in the full knowledge that he's being diddled?

Compulsory Purchase Order....

Now Ming there are 160 million people in Pakistan - if they all come here we will have no farmland - so how about Scotland ? Sutherland looks to have lots of empty space since the sheep-worriers rans off to America

David Boothroyd said...

Sir Ming has obviously never seen what Lib Dem councils do when presented with large social housing schemes, which is to reject them. Lib Dem councils in London have the worst record for delivering social and affordable housing.

I would have thought this scheme would be dubious on the grounds of predetermination of planning applications if it is going to be successful.

CCTV said...

Barratt 15%, Persimmon 18.5%, which major housebuilders are you saying have reported 50% profits?

June 14, 2007 2:20 PM


But they don't book the appreciation in their land banks to P&L do they ?

Hughes Views said...

Behind every madcap scheme there lies a grain of sense. Relaxing planning controls on farmland seems a reasonable way of increasing the housing stock. Curiously enough, at least around where I live, most of the opposition to such building comes from Tories - you know, those people who detest regulation!

Still it's never going to happen because it's in nearly everyone's interest (anyone with any influence that is) to keep the supply of houses down and hence prices up...

Newmania said...

Incidentally, before you silly Tories

To whom do you refer you patronising smug pointless ..well Liberal really

I `m not at all sure this has nothing to be said for it. The community idea was better because the Coucils will waste the mioney and lose it . It also provides a forum for the politics as the Couicl wil be devaluing the homes of all their voters especially if they impose " Social Housing " requirements .They probably will.

Matt Davis said...

Perhaps all those of you who think that there is anything either liberal or democratic about this crackpot scheme will also think that it's ok for me to force you to sell me your home at cut price so that I can then make a mega profit on it and claim that there is some nefarious "community benefit" in my doing so.

Just goes to show how completely useless Minger Campbell is, long may he stay LibDumb leader and so continue to render then unelectable.

CCTV said...

Ming Campbell is Robert Mugabe expropriating white farmers.....

machiavelli said...

I could comment on this policy, but you'd delete it!

The Remittance Man said...

Doesn't matter which paty(ies) are for this; it still amounts to theft of assets from individuals by the state.

Does this mean the Limp-Dumbs are finally going to admit the truth and drop the "Liberal" from their name? I'd have thought keeping it there would actually contradict the Trades Descriptions Act, not to mention the Fraud Act.

Newmania said...

Matt , the Farmers will be selling their land at a profit and will do well out of it . If someone offered me a cash bonus for my property and the only drawback was that they would do even better I `d be a happy bunny.
The farmers will love it they couldn`t care less , the neighbouring community may be less impressed as the worth of their properties will go down and that is essentially the tax they put on the property owner.They aren`t going to be compulsory purchases are they? This taking money from Mortgage payers and putting into the tax pool has been going on for ages anyway a super stealth tax. Thats how we all pay for subsideised state housing (The main way)


Lib Dums don`t care about that though they think that no-one makes sacrifices to buy property

Trumpeter Lanfried said...

The government should have nothing whatsoever to do with housing, affordable or otherwise. It's none of their business where people choose to live.

The great housing disasters of the 20th century, (rent control, tower blocks, sink estates), were all caused by government interference.

Ming should stick to foreign policy, the only thing he really understands.

Geoffrey G Brooking said...

These geek Lib Dem plans are nothing short of corrupt.

Newmania said...

I think you are all a bit harsh on the idea though. You cannot keep stuffing the inner City with higher and higher density housing . It has to go on the Green belt .

Why should most people live in a shoe box so suburbanites get a nice view when they have a picnic. No bad idea to speard the coutires social problems around a bit as well. Something like this has to happen.


...and what has land tax got to do with it ?

Guthrum said...

Since 1947 when the planning acts were introduced the market has not been allowed to work the supply has been kept artificially low, with the net result that prices have gone through the roof. The haves are not going to allow the market to work, but the have nots the up and coming generation with no chance of getting on the housing ladder will force the issue, and you can forget lame equity share schemes

bergen said...

Ming having another "senior" moment?As the Lib Dems are a more rural party than Labour,it is especially brave to target the farming community as fat cats.

BJ said...

Labour MP Martyn Jones today won #5,000 High Court libel damages from
Associated Newspapers over a claim that he subjected a Westminster security
guard to a foul-mouthed outburst when asked for his pass.
end

141607 JUN 07

Newmania said...

The haves are not going to allow the market to work, but the have nots the up and coming generation with no chance of getting on the housing ladder will force the issue,

No they won`t,they continue not to vote. This country has become adreadful place to young in.( I `m sort of in the middle myself )

Tim Leunig said...

As Jock Coats says, this is an idea which has been endorsed by Michael Gove - Tory Housing Spokesman, and all round clever person - in a joint Centre Forum / Policy Exchange event in which he and Ed Davey were speakers. I was there, I heard him. It is also included in the Barker Review of Land Use Planning, which called on the govt to gather enough data to run a pilot (section 7.22-7.25 if you want to check. It has also been covered in Town and Country Planning, the relevent policy journal in the area. Or you can download the paper that sets it out in full from http://www.centreforum.org/assets/pubs/in-my-back-yard.pdf. You can also find an endorsement of it from Tory Peer Lord Lucas at http://www.centreforum.org/publications/in-my-back-yard.html.

The BBC's explanation was not great: no-one is compulsorily purchased, and no-one has land taken away from them at a price other than the one they set themselves. Indeed, the figures assume that farmers will ask for and get 10x the fair (agricultural) value of their land under the scheme - and believe me, if anyone offered me 10x the value of my house for it, I would be delighted. What they won't get is 300x the value of their land, as at present. That gain will go to the community, who created it by giving planning permission.

This scheme is liberal and localist.

Theo Spark said...

We would love to build some low cost housing, but the district council will not change the village plan, so everyone's back garden is now a building site.

Roger Thornhill said...

This is not just about the corruption-magnet that is Local Council + land, but they also want to screw up subsidised housing (if that were possible) and thrusting social housing on everybody while being ignorant of the true cause of sink estates - the Landlord.

I consider them to be the worst kind of mutton-headed numpties.

Newmania said...

Thanks Tim I must say I was wondering what exactly was so bad about the idea. The remaining problem seems to be that the government will be in effect taking the value of the surrounding properties which will drop as the land value rises and dumping a load of "Social " housing "(= slum Labour and Lib Dem serfs trapped in poverty) ,in the area ,further to the detriment of the property owners there. It will not be popular and I feel it would be better that the money never disappeared into the Council where it will be eaten up by the inefficiencies and cronyism of the state. The Property owners in the neighbourhood affected by the planning should directly benefit as they directly lose. Otherwise this is another form of tax specifically on Mortgage borrowing , again something that is standard in Social housing in London and the way “ Social Housing “ and Social this and that is always financed
In Conservative Hands this would be a good idea and I`m curious to know exactly how the Conservative scheme differs.

Of course if the Labour Party didn1t keep giving houses and benefits to people to stay where they cannot afford to live they would move and the cheap housing would attract work. The North is empty .

Madasafish said...

imo most politicians are either
mad or bad
or
mad and bad.

Ming proves the point.

Steve Horgan said...

The problem with house starts in this country is because Labour messed up the planning system. Releasing land for housing is now a Kafkaesque nightmare, and it became so when Local Plans were replaced by Local Development Frameworks. Even if Ming's crackpot idea were to be allowed it would still fail in the face of the current processes. A much better policy is just to fix them and then let Councils and the market do their thing.

Anonymous said...

Calm down, Dear. It's only a game.

As Ming has exactly zero chance of gaining power his policies are irrelevant. He has to announce something - there is Cameron banning timber imports and grammar schools, Hain and Harman wanting to redistribute wealth [but not theirs], Brown is going to make a Fresh Start, Letwin talking in tongues - what is the poor old chap to do? He can't spend all of his time finding money to replace the illegal loan.

Victor

Tim Leunig said...

To Newmania, re June 14, 2007 5:05 PM

There is no reason that the new auction scheme means more social housing, any more than under current planning policies.

In fact, one aspect of the plan (see the Centre Forum pamphlet) is that current land owners can restrict what the land is used for (this will give landowner's confidence that if they sell half their land, they won't end up living next to a big industrial development. They can also restrict the land to flats, etc.

Furthermore, as property prices become more affordable, (at least over time) the need for social housing will diminish, as more people will be able to afford a place of their own. In particular, "key worker housing" for people like teachers can probably be allowed to wither away, since teachers would be able to afford to choose where to live. My hunch, therefore, is that a more liberal planning policy means less need for more social housing, not more.

As to what the council does with the money, well that is up to local democracy. The best think would be to start the process before the election, and then have the election with an anti-development party standing on a no-development-high-tax-bad-service manifesto, and "right wing" and "left wing" pro-development parties calling for more development, with the money going to tax cuts and better services respectively.

Best wishes, Tim
(t.leunig@lse.ac.uk)

young pretender said...

I guess that's simply initialling his signature on his own political death warrant!

Tone made me do it - he's a bad influence said...

Simple

Allow local councils to sell planning permission.

1.Decide how many new houses/extensions to allow in the area each year. Allot each village a number of these- say one a year.

2.Impose local "aesthetic" rules so that new build natches the character of the area.

3. Auction off the planning permissions at an annual auction.

Much of the "planning gain" therefore goes to the local community who are most effected by the developments.

Everyone's happy.

Look, the English, by not allowing development in the green belt are slowly committing suicide (high house prices lead to low fertility rates).
We are only saving the green belt so that a replacement race can build on it in a few years time.

forthurst said...

We are bound to continually run out of land until the supply of people is under control. The country is awash with illegals and EU imports and others. This is a small island and I see absolutely no reason at all why the english reasonably should be expected to tolerate their country being concreted over in stages for the benefit of third world and East European immigrants who rather than learn how to develop and exploit their own countries properly want to occupy this country and bring with them demands for the english to 'understand', 'accept' and even adopt their own primitive customs.

tapestry said...

In cities do what the rest of the world does - build skywards. Suburban life is inefficient as regards energy use. That's why the USA consumes more per capita of energy than the rest of the planet. Their suburbs have sprawled. If we want to be energy efficient, we have to build condominia up to 50 storeys high, connected to efficent public transport links.

The era of the sprawling suburb is surely over.

Newmania said...

Tim - Key worker(= Public sector paid vote with Union)..grants are suffered by others(equally key if not more so) obliged to commute and travel.They are already an outrage and social housing is perhaps the most pernicious error in the Socialist religion.
There will never be an end to demand for cheap and free housing ..why why why is this so hard to grasp ?
Local democracy does not work where the state buys votes with the money of wage earners which in effect they will. The idea that Coucils will use such money for tax breaks is wilfully optimsitc and the impact on house prices is a decade away at least . In fact at current levels of immigration and social developemnt of immigrants ( ie single occupancy) we will have 70,000,000 plus over the next 15 years and no hope of keeping pace.

I foresee bitter local battles about this which will also have the effect of destroying the Green belt and the Southern Landscape BTW Right wing support for developement is for their own development not the eradication of their main asset.

....Still it is a serious problem and overall.....

...its the best idea I have heard and these issue are seperate really and , as you say , already entrenched in the system that has turned London into slum with a few bankers in the middle.

javelin said...

Fantastic a mega-sink-estate!!

A cluster of New Labour MPs somewhere in the East Midlands.

Anonymous said...

Witness the proposals for Harlow in the East of England Plan. A scheme for the BP pension fund to build up to 25,000 house was rejected at the public enquiry stage only to be reinstated by the Government. This pension fund will make billions of pounds if the scheme succeeds


Doesn't the government have its finger in this very lucrative development pie too?

I'm told that the government received £28 million from the sale of a piece of land to the developers of another large scheme at Harlow.

Are you one of the Stop Harlow North campainers?

Anonymous said...

Woops, meant to say: are you one of the Stop Harlow North campaigners?

Jess The Dog said...

Barking mad.

There are many reasons for the problems with housing. If a local authority has a delay to its development plan (with housing land allocations) often caused by a subsequent delay in ministerial or regional approval, then a developer can often gain planning permission on appeal for new sites because the local authority hasn't met its requirement to provide a supply of housing land. There are delays caused by the selling-on of land with planning permission for profit and through the negotiation of legal agreements for contributions to infrastructure provision and affordable housing. The prediction of the requirement for housing is based on an extrapolation of past demographic trends and often exaggerated, and there is no requirement to consider the existing stock in making these predictions. Also, the issue of house price increases is distorted. House prices are not relatively high when salary inflation and the increased willingness of lenders to offer larger sums is considered - however, first-time buyers have to raise larger deposits that can be beyond their means.

The issue is not the supply of, or demand for new housing land. Almost all other areas of policy have moved from simply meeting demand to demand management based around sustainability, but housing has not. Housebuilders should build at higher densities on brownfield land, rather than creating clone town sprawls on unsafeguarded agricultural land. Every other policy area is moving towards centralisation and reducing the need to travel. Housing should be provided at high densities close to amenities, but this requires an attractive public realm with well-maintained public spaces free from antisocial behaviour,

Tim Leunig said...

To Newmania June 14, 2007 7:31 PM

Thank you for your support!

As you say, there are separate issues about (1) planning, (2) Social/key worker (aka subsidised) housing and (3) immigration. The idea of community land auctions addresses (1) planning, although I also hope to publish some (separate) ideas on (2) later in the summer.

(3) clearly has an effect, but most studies show that it is surprisingly small compared with the effects of an aging population leading to lots more single people living alone (whereas immigrants generally share flats)

You say that no council will ever cut council tax, but I wonder: at the moment the Tories control lots of councils. Are you really sure that there are no tax cutting Tories left? Or that a new party that offered £1000 off council tax would not have electoral appeal? Only one way to find out...

Anonymous said...

CCTV said...

Now Ming there are 160 million people in Pakistan - if they all come here we will have no farmland - so how about Scotland ? Sutherland looks to have lots of empty space since the sheep-worriers rans off to America


Excellent point, CCTV! When are Ming, Broon and Cameron going to address the real issue here - the catastrophic effect of unmanaged and out of control migration on England in general and the South East in particular?

Like the majority in England I'm sick to the back teeth of the government's policy of overcrowding our country and the huge damage this is doing to our communities, our services, our road and transport systems and national values.

garypowell said...

This country my be a small country but it could hold and sustain a population several times the size it currently has. All it need cost us, is a few nice views and the odd bird sanctuary.

In Hong Kong 2.5 million people live on a rock the size of Orpington. Which although some may say is overcrowded, has only a population of about 100,000.

In Hong Kong you can still get a seat in the park and a place on the beach to lay down on. This mainly because people are to buzy making money to laze around all day, unlike large parts of 3rd world London, for example.

Its also worth noting that inspite of the massively high population density in Hong Kong there is so little crime or poverty that the type of person most likely to be sitting on a park bench in the middle of the day, is a policeman.

BTW
Beware of any politician that claims it is a 'GOOD THING' that the state in its local or national form should take any more wealth out the peoples pockets.

FOR ANY REASON WHATSOEVER

Because it is more obvious now then it has ever been that ANY AND ALL governments do not have the slightest idear what the bugger they are doing never have and never will. So its best for all concerned that thay leave alone as much of HUMAN exsistence as is humanly possible.

Their greedy ignorent and superficial lying personas are only superceeded by their self-interested and childishly incompetent policies.

As for most politicians even passing understanding of simple straightforward classical "LIBERAL" economics.......Words just can not describe.

So lets put it this way. I think my grade B O level in Commerce must trump Mings must have just about got, CSE grade 6 in adding up and taking away.

I think Ming should stick to what is the only thing all politicians are honestly capable of doing well at.

Which is getting older every day.

Anonymous said...

One crucial issue that no one has raised is that of the massive amount of infrastucture and employment these unsustainably large South Eastern development schemes would require.

Hospitals
Health services
Schools
Roads
Sewage
Water
Development related flood prevention schemes
Public transport

All these services in the SE are in dire crisis NOW and nulab is largely just evading the issue. Where are the massive sums required for expansion of these services to come from?

Yet another increase in local and national taxation?

Is it not hopelessly irrational to continue to dump unsustainably huge housing developments on the SE while Scotland and the North East have countless empty houses and under used infrastructure aplenty?

Scotland no longer has high unemployment, I believe the government has brought it up to the national average - and it has living standards equivalent to, or better than, those of the SE.

Given the above, Scotland's lack of contribution to providing work and housing for migrant workers surely gives a whole new meaning to the expression getting off 'Scot free'.

Liberty

Ralph said...

Campbell is just following the 'only government can do it' philosophy that the Lib Dems are obsessed with.

The answer is to give planning permission to all the scraps of land dotted around most towns and villages.

Newmania said...

Tim-Alright then think about this. In London the requirement is for 70% of new developments to be "social " or "key"( which fools noone). If this is the rule then more housing is just going to makes things worse.
This many distorting effects the most serious is which is to encourage neediness on the points system ,single mothers (lone parents as modishly called), and to trap poverty most seriously of assets as a life style choice. Subsidised housing creates its own demand for obvious reasons and as it is with held from the market it raises house prices for everyone else ,as a secret tax. In my Borough there is already 50% social housing but 70% are on support (to be fair including pensioners),. Into such an impossible social mix another 13000( which are coming) is hardly going to make things worse they are already so bad they it is not possible
Rural and suburban areas will not put up with this and if there was a real effect on house prices that would also be unacceptable to the homeowner who will have made long term sacrifices to acquire an asset. It would punish self reliance and prudence. Have you thought of the impact of deflating the housing market if it were possible and how welcome that would be ?In other words the housing market is something most people like and certainly any real effort to undermine it would be suicidal as the Conservative Party well knows from negative equity.. Political concern is more or less lip service , noone would ever dare bankrupt the working population in the productive sector This equation is now vertiginously poised with gearing up to five times salary . Remember the rise in the value of their asset is about the only thing that has kept the prudent and ( vaguely )aspirational wage earner on board-ish , with the high tax high spending Government we have.
So I think this idea , and some version of it is surely inevitable , would have to be small scale and very incremental. If the Socialist inner City model were wheeled out into the country it would do more harm than good with great individual unfairness along the way .

Still no doubt all of this has been thought of and we certainly cannot go on as we are . As for tax cuts , nonsense there will soon be tax rises to afford all the services the new people , from all over the world , will subsequently need. So those are all the negatives and over all imagining that the political context can be removes from public housing is not realistic , it is all about politics.

Small scale and trial and incremental localised schemes strikes me as a suitably cautious way to go .I am not surprise this has Conservative support though it has a lot of sense in what is an exceedingly intransigent problem

Cheerio

amhuo

Anonymous said...

Ralph said...

The answer is to give planning permission to all the scraps of land dotted around most towns and villages.


You have not adressed the issue of our massive infrastructural crisis.

Where is the extra infrastructure required for this - plus that required to fill the current deficit - to come from?

Who do feel should pay for this, middle England's local and national tax payers again?

Jess The Dog said...

Further to my points above, the issue is simple: there is no housing crisis, and certainly no justification for the large-scale release of land for housing.

There are pinch points and hotspots, particularly affecting first-time buyers and those on low incomes in high demand locations. However, meeting demand will not help these groups and a combination of the market (longer term mortgages) and state intervention (shared equity schemes) can mitigate these problems.

Much is made of the growth in house prices. By way of comparison, the growth in expenditure on personal goods (non-food shopping) is around 4% per annum. No-one is talking about a crisis or collapse in this market.

Many of the assumptions regarding a housing shortage and the need for large-scale housebuilding are flawed. Latest demographic projections show that the anticipated demand for new houses created by falling household sizes is likely to be less than anticipated. As pointed out by other posters, housing land can support higher densities, and the infrastructure requirements of large-scale housebuilding are simply unsustainable.

Building at higher densities within established settlements - particularly on brownfield land - and with targeted intervention (on-site affordable housing, not seperate ghettoes) is the way to ease pressure in these pinch points. The housing market affects us all equally; most are in the same boat and make money on selling but need it to buy again. There are very few who make a killing out of property.

As an afterthought, I believe the buy-to-let investment phenomenon is unsustainable and damaging, but that this has largely been driven by the pension fund raids of Gordon Brown, simply transferring the pressure to the housing market.

Tim Leunig said...

To newmania June 14, 2007 9:18 PM.

You make a number of points. (1) the distorting effects of social housing. I recollect that you are in Islington, which of course has some of the highest levels of SH in Britain, and some of the starkest disparities. So your experience, although real, is not typical. As I said, I hope to publish some ideas on this later, but I reiterate that if we can get house prices under control, fewer people will be unable to afford market priced housing, which makes all sorts of reforms to social housing much easier. Like you, I don't see social housing as the ideal way forward. If you are interested in how and why social housing is failing, do read my colleague John Hills recent report for CLG, available from http://sticerd.lse.ac.uk/case/news.asp (it is item two, scroll down to find it).

(2) House price collapse. No-one wants this, least of all me. But as you say, the longer we leave current rises, the worse the potential fall. It is sometimes better to have a small fall than a large fall. The best solution is a period of (nominal) house price and rent stability. After 5 years this would reduce the house price to income ratio from 6.1 to 4.9, which would be a good start, and all without anyone getting into negative equity. After ten years the ratio would be 3.9, which is not too far from where it was in 1997, and would certainly mean that teachers etc would be able to afford market priced housing almost everywhere in Britain, even if they are the only earner in their household.

Demand perceptions dominate prices in the short run, so no policy maker can guarantee the avoidance of a slump, but I do think I have designed a system that makes slumps less likely in the medium term, since it creates a demand-responsive but self-limiting mechanism for land supply. In the short run it is hard for Britain to build its way into a house price crash because we just don't have that many builders, and because there is a lot of pent up demand.

(3) Infrastructure. With current land prices a council would gain about £85k per house that it allowed to be built. That is enough to cover the cost of infrastructure etc, by some margin. It is far larger than current S106 planning gain payments, for example.

Rest assured, this is a scheme that is anything but socialist! It means that central planners no longer decide how many houses should be built and where. In that councils will make less money if they require high levels of social housing, it should make them think about whether key worker housing is the best way forward (why not do what the private sector does when it can't recruit, and pay more in the south east, and let teachers etc decide for themselves where to live?) It allows local communities to reject all development if they choose, and Whitehall won't be able to tell them off.

As you say, all large changes should be piloted, and this scheme certainly should be. But I imagine that if we offer councils the opportunity to gain about £85k per house they permit, they will be queuing up to be in the pilot.

Anonymous said...

Tim Leunig said...

(3) Infrastructure. With current land prices a council would gain about £85k per house that it allowed to be built. That is enough to cover the cost of infrastructure etc, by some margin. It is far larger than current S106 planning gain payments, for example.


You aim to cut house prices - and presumably land costs? So wouldn't the returns for LAs be reduced too?

In any case, you have £850 million to play with:

New hospital: £250 million
New sewage system: £ 500 million?
Widening M Way section: 300 million

You're way over budget and you haven't begun to address the water supply, flooding, public transport/new station, new schools issues

Liberty

Newmania said...

Well Iain , if you look back at this thread I think you must agree that Tim L has made a very compelling case.
Perhaps you would reconsider your outright opposition?

CCTV said...

No they won`t,they continue not to vote. This country has become adreadful place to young in.( I `m sort of in the middle myself )

June 14, 2007 4:43 PM


During WWII all sorts of residential areas in London around Upper Brook Street, Baker Street, Russell Square were taken over for use as Government Offices - postwar they remained commercial and now house hedge funds, comnsultancies, brothels......maybe making them housing for asylum seekers would be an idea and rezone all these areas residential

In fact there seems no real reason for any non-retail business to have offices in The West End at all.

Roger Thornhill said...

IIRC in the 1930's enough land was zoned for housing to accommodate a population of 300million. Even at Dickensian levels of population density, I think we should have been ok - I wonder what happened?

If Tim L's idea is truly localist, we need a referrendum on each scheme. I think that might throw a spanner in the works and thus it will cease to be localist in the true sense. I am sorry, but somewhere in my head Local Councils + Land/Development = Corruption. To keep it clean you need oversight as a 'fly-by-wire' aircraft, because systemically it is so unstable and out of balance as to need constant correction.

cctv: you forgot the point about dedicating Lincolshire to the production of umbrellas.

Tim Leunig said...

This scheme reduces the scope for corruption compared with the current one. At the moment a council can enrich a landowner by millions a hectare when the local plan is drawn up, giving huge incentives for people to offer corrupt side payments.

Under my scheme the gains to landowners are much smaller, and so the incentive for corruption is reduced.

In addition, the price at which all land was offered would be public, so if the council accepted hectare x at £3m, rather than hectare y at £30,000, there would be some explaining to do! Sometimes there would be a good reason not to take the cheapest land, but even so, knowing that the council is paying over the odds, and particularly a lot over the odds would be a good reason for local people/journalists/the police to start investigating.

In short then, compared with the current system, my scheme reduces the incentive for corruption and increases the ease by which it can be detected.

Happy to keep answering objections people have.

Anonymous said...

If the Tories had not got rid of development land tax then the unnaturally large profits made by developers and speculators would at least be partly tempered for the public's benefit.

What is strange is why, in an overheating economy, Brown doesn't reintroduce such a tax and perhaps have a go at the non-domicilliaries as well. Why should the middle classes in Britain be the only contributers?

Anonymous said...

Macmillan wrote the script in the fifties.
Cameron should have already promised a new build of council houses. It is NEEDED.

Again the Lib Dems steal what Cameron should have announced. I wrote to him months ago with this suggestion. Got a note from his flunkies telling me to go away (politely)

builder said...

People need houses and they have ti get it. Some people find ways to make money out of it