Ask yourself, what is the incentive for the big developers to build enough housing to meet demand?
Building enough housing would force down house prices.
Developers are in a position where they can manipulate the market by controlling supply to keep prices high and profits higher still. They have created the perfect investment vehicle with ever present demand from a rising population in the UK coupled with the basic need for a roof over people’s heads.
It is reported that almost 500,000 new homes in England and Wales have planning permission but haven’t yet been built, despite a huge housing shortage. Developers have been accused of profiteering for years and yet no penalties have been levied on them or their growing land banks.
Recognition of the developers’ role in restricting the supply of housing to boost their own profits at the expense of ordinary people is growing.
The Guardian recently reported that “the number of unbuilt homes with planning permission has reached record levels and is 25% higher than five years ago.”, furthermore “the nine biggest house builders are sitting on enough land to build 615,152 homes. This includes plots with planning permission and those without.”
Developers are firmly in the driving seat, riding roughshod over government targets and laughing all the way to the land bank. Believing that the major house builders will play their part in providing access to a reasonable supply of more affordable homes has proven to be misguided and rather like putting the fox in charge of the hen house.
This is surely the time to take back control and introduce a land bank tax –if developers don’t build within a certain period of time they pay a punitive rate of tax. Worries that the big builders will throw their toys out of their pram and stomp off is counter-intuitive and like killing the goose that lays the golden egg.
Furthermore, developers should by law have to publish a public record of all land that they own.
We know that developers will only build at the rate to maximise their profits, not in line with housing need. Why is permission being granted for more and more valuable green fields to be concreted over when developers are not building the houses they’ve already got permission for?
People are struggling to get on the housing ladder and the controlled rate of completions is keeping prices artificially high and forcing people to take on eye-watering loan to value mortgages. The term “Mortgage Zombies” has emerged in the UK, where people are simply working to pay their mortgage and nothing else.
An overall average house price in Cranleigh is now around £472,745 how many people can really afford that?
The fact is the big house builders are not delivering the homes that are needed, despite planning applications being approved, and are amassing more and more land, shifting the balance of power even further in their favour.
Targeted Government funded incentives, like Starter Homes, don’t seem to have worked, surely its time for a major rethink?
