and if you then factored in cost of interest on their previous mortgages as well ……
What kind of assumptions are made about landowner and developer profits though? The last and this government were assuming a developer profit of 15-20% was reasonable, but I read a blog by a Barrett's big cheese that indicated that a tenfold uplift for landowners would probably not be enough. The reason why the planning system is used to get sites and funding for ' affordable ' housing and infrastructure is that previous attempts have failed to tax that uplift in land value when planning permission is granted. The greed of landowners is another reason why house prices are so high.
The large scale builders do it in a managed way though. The large builders in London have several sites on the go at any one time but they are constrained by finance. Dare I say it, but the large sites in London are heavily marketed to the far east markets for investment purposes. Walk around Chelsea Harbour in the evening and see how many lights are actually on in those apartments.
I was told by someone working in a marketing suite at one of these big sites being developed by St William (the gasworks division of Barretts - same developer who are trying to develop Black Rock gaswork site in Brighton) that they were almost exclusively marketing to China and the Far East at higher prices than most locals could afford - they were effectively being used by Chinese people to transfer capital out of their country and probably only occupied for a couple of weeks a year.
The Battersea Power Station Development Company is funded by the Malaysian Government through Malaysian Property Companies. The total cost circa £9 Billion. No wonder some apartments are selling for north of £11 million each.
It’s standard practice to build a physical model and use the Hong Kong offices of the major estate agents (sorry, real estate consultants) to market the large sites in the far east. I wouldn’t know if they pay more than locals, but it is standard marketing practice, particularly as the Chinese domestic property development market has nose dived after a major developer there went belly up.
I won't argue the point that there were delays, but they weren't helped by constant Tory cuts (on average, planning departments lost 40% of their staff) and the replacement of regional planning - that imposed a housing number - with the farcical Duty To Cooperate where councils are expected to agree to take each other's housing demands. In the Sussex coastal strip, this puts pressure on councils like Wealden, Mid Sussex and Horsham to soak up some of the pent-up demand from B&H and Crawley. Never popular with local politicians, people and usually inadequate infrastructure in place.The local plans (I await @BrightonCottager arguing with me) often took many more years to complete than the deadline and failed to deal with the numbers shortfall during that long extra delay ... compared to other planning authorities. I know this for a fact with BHCC, a planning expert demonstrated this to me.
Then our population has risen by 11m since 1997 and nimbies hate this, people want to live in southern England e.g. by family.
The local plans that emerged from 2015 onwards in total fail to deal with the huge population gains etc.
And what a monstrosity that is.
I presume you're not proposing that someone (presumably the homeowner) should pay for a proper revaluation every year. And I also presume you're not allowing people to let the garden run to seed to reduce the taxes, so it couldn't be on a house-by-house basis.
I had several colleagues in HK that had significant property portfolios in the UK.... didn't even bother to rent them out much of the time, simply a 'store of value' away from China. They always bought flats for their kids when they sent them to the UK to study too.
Economics for Dummies ?
Build more houses - particularly on brownfield sites - with a larger % available as social housing
^This seems the most obvious range of options.
I've made no secret of the fact that I'm a 'greedy, parasite, landlord' and (because I'm not a greedy parasite) fully support more regulation around the rental market including some form of rent control, absolutely for tenants in place. Trying to have landlords sell up though does nothing to help our housing crisis though, it simply shifts (slightly) the imbalance of supply and demand from but buying to renting. Such is the demand for renting that in some of the areas I have houses rent prices have risen by about 80% over the last 6 years, far far outstripping the buying market. Some people need to rent, some people want to rent so should they be penalised by your proposed legislation?
