£1 million homes sales in East Devon increase by 157% in 10 years

“Million-pound sales have increased by 157%, with 7 sold in 2007 and 18 in 2017, with the most expensive sold for £3,100,000”

For comparison: In Exeter there were 55 homes over £1m sold since 2007, with the most expensive sold for £2,900,000


Government non-expert “independent” expert refuses to ban combustible cladding used in Grenfell Tower

“Dame Judith Hackitt proved yesterday that appointing ‘independent’ experts is no guarantee that difficult policy areas can be somehow magically be set free from politics. She started off badly yesterday and it was downhill all the way afterwards. On the Today programme she struggled to explain why her review had failed to recommend an outright ban on combustible cladding. That was followed by an almost comical U-turn, saying that perhaps she should have recommended a ban. Then Housing Secretary James Brokenshire announced he would consult on a ban. It was not a coincidence that the panicked responses came after David Lammy, who has a moral authority ministers cannot ignore these days, declared the review a ‘whitewash’.

But things looked even worse later, when she told reporters “I am not an expert on Grenfell” and “has not looked into the details” of the fire that killed 71 people. With a Whitehallese worthy of Sir Humphrey Appleby, she declared her review was instead “triggered by the discovery that there were many other buildings that were not safe”. That’s true, but to say also that “my review was not triggered by the tragedy at Grenfell” was just plain daft.

On Question Time last night housing minister Dominic Raab said: “I’m sorry it’s taken so long” [to respond to Grenfell]. Meanwhile, a new report says four million homes are needed to solve the UK’s ‘epic’ housing crisis. Brokenshire needs to get a handle on his new brief rather quickly.”

Source: Huffington Post

“Don’t make developers pay for social housing” … says BIG developer!

“One of the country’s top property developers has described the UK’s system of funding social housing as “nuts” and called for higher taxes to speed up building.

Roger Madelin, a member of the executive committee at British Land, told the Guardian the decades-old system of getting private developers to pay for affordable homes was “a stupid way of meeting this social need” and that the government should directly fund them.

“All companies should pay higher corporation tax,” he said. “This country needs to have more tax paid. If we did it like that we could get on and do it. It can’t work in the long term, you can’t expect developers to continue to produce for the population’s social needs at this level. It should come from general taxation.”

Madelin’s suggestion will raise eyebrows in the notoriously profit-driven property industry as it implies increased taxes on its profits. But he is a respected figure who led the regeneration of King’s Cross in London as well as Brindley place in Birmingham and his remarks reflect growing frustration that the system is not only failing to deliver enough cheap housing, it is also a drag on development.

He made his proposal as British Land submitted one of the UK’s largest planning applications for a £3bn regeneration of Surrey Quays in east London, with 3,000 homes, up to six skyscrapers and several new corporate headquarters on a site stretching across 53 acres – similar in size to the regeneration of King’s Cross. It is located about a 20 minutes’ tube journey from the City of London, between Shoreditch and Peckham, two rapidly gentrifying areas, on the London overground line. Some 35,000 people already live in the Rotherhithe peninsula, where the development will take place. …

Madelin believes that by avoiding the current haggling between council officers and developers about how much they should contribute to affordable homes, the government could regain control of how much and when much-needed affordable housing could be built.

“I find it nonsensical that we go through these viability assessments,” he said. ‘If you have a shortage of cars then you wouldn’t get motor manufacturers to subsidise people who can’t afford a decent car.” …”


“£250m spent but no starter homes yet built under flagship fund”

“The government has spent £250m to boost starter home construction without a single property being built so far, it has emerged.

Dominic Raab, the housing minister, made the admission in response to a question from John Healey, the shadow housing secretary, who described the situation as “a betrayal of young Brits looking for help to buy a first home”.

In March 2016 the government announced a £1.2bn fund to help deliver “200,000 quality starter homes by 2020 exclusively for first-time buyers at a 20% discount on market value”. The promise was originally made in the Conservatives’ 2015 election manifesto.

The aim was to use the cash to support the purchase and cleanup of sites to guarantee the construction of starter homes. The policy recognised that the cost of making brownfield sites useable could make some places unviable for development. Ministers believed that targeted interventions could help increase housebuilding at the bottom of the market where the affordability crisis had bitten most deeply and particularly affected millennials.

In January 2017, Gavin Barwell, then housing minister, said the first homes would be built that year after partnership agreements with 30 local authorities.

He said: “This first wave of partnerships shows the strong local interest to build thousands of starter homes on hundreds of brownfield sites in the coming years. One in three councils has expressed an interest to work with us so far.”

However, after Raab confirmed that “£250m of the starter homes land fund has been spent to date”, a spokesman for his department said, adding: “At the moment no specific starter homes have been built yet.”

The government has now placed the operation of the flagship fund under review.

A spokesperson for the Ministry of Housing, Communities and Local Governmen, said: “We have spent £250m buying land to build affordable properties, and work is underway getting them ready for development. It is important we get starter homes right and we aim to introduce regulations on them alongside our new planning policy before building gets underway.” …”


“Housing Issues Can Make Mental Health Problems Worse”

Well, duh! No surprise there!

“Housing issues can make mental health problems worse or even cause them, according to a new study by the mental health charity Mind.

The charity surveyed 1,780 who described themselves as having mental health problems and nearly four in five of those said a housing situation had made their mental health worse.”…


“For every home built 2014/5 £60,000 went to landowner”

Thomas Aubrey of the Centre for Progressive Policy:

“Our system favours landlords over communities. The PM must side with the many, not the few.

Theresa May is right. Britain’s housing market is broken and needs fixing. Homelessness and rough sleeping are rising and owner-occupation levels for the young have collapsed because homes have become unaffordable.

The average private rent in London accounts for more than a third of household income. The bill for housing benefit has risen eight-fold since the early 1980s after inflation is taken into account. House building has risen since the lows reached during the financial crisis of a decade ago but needs to almost double to hit the government’s target of 300,000 new homes a year by the middle of the next decade.

Yes, the housing market is broken all right and for the Conservatives, a party that sees itself as the party of the homeowner, it is a serious political headache.

A crisis has been brewing for decades – and left unattended the problem can only get worse. Britain has a rising population and the trend is for smaller households, both of which mean demand for housing will keep on rising. The weak growth figures for the first three months of 2018 will keep borrowing costs on hold for now but sooner or later the Bank of England will raise interest rates. That will make it still harder for people in their 20s to get a foot on the housing ladder.

Yet sketching out the problem is one thing. Coming up with solutions is trickier.

Replace a regressive council tax with a land value tax? Labour is thinking about a LVT but there is no chance the Conservatives will introduce what they have dubbed a “garden tax” that would hit millions.

How about giving some of the anonymous farmland in the green belt over to housing development? The thin end of a wedge that will result in the south-east being turned into one big urban sprawl.

Make prime residences eligible for capital gains tax? Are you kidding? Politicians know that Britain’s housing market is broken but mess with it at their peril.

The problem is so big, however, that changes have to come. London’s mayor, Sadiq Khan, wants to increase the supply of lower-cost homes in the capital, so under City Hall guidelines private development proposals where affordable units make up at least 35% of the total will be fast-tracked through the planning process. Under 35%, and developers can expect a much tougher time.
But as Daniel Bentley argues in a new pamphlet for the thinktank Civitas, the problem goes deeper than the planning system. Forcing councils to grant more planning permissions in high-demand areas doesn’t guarantee that the supply of new homes will markedly increase.

The reason for that, Bentley says, goes back to the 1961 Land Compensation Act passed by Harold Macmillan’s government. This enshrined in law the right of landowners, in the event of compulsory purchase, to be reimbursed not only for the value of their land as it stood but for its potential value if it were used for something else in the future.

A system so heavily weighted in favour of landowners had two consequences. First, it provided them with an incentive to wait, often for years, before selling their land for development because they would get a higher price. Second, house-builders had to recoup the costs of buying the land and did so by building more expensive properties that were drip-fed into the market to keep selling prices high.

If the aim is to build more affordable homes, this makes no sense. A site with planning permission for housing is worth more than a brownfield industrial site and 100 times more than agricultural land. Research by Thomas Aubrey of the Centre for Progressive Policy found that landowners made windfall profits of more than £9bn in 2014-15 on the sale of land. That meant for every home built that year, an average of £60,000 went to the landowner.

Bentley says the entitlement of landowners to this “hope value”, the prospect that it will be worth a lot more if used for something else, means public authorities are powerless to enforce development priorities that are in the interests of the community.

“This was not always the case. The new towns that were initiated before the 1961 act, and much of the local-authority output of the late 1940s and 1950s, was underpinned by a land values policy that meant landowners were compensated at values reflecting the existing use of the site,” he said.
“This meant land for new homes could be acquired at or close to its much lower agricultural or industrial use values. It also doused speculation and prevented the withholding of land.”

Reforming the 1961 act so that public-sector bodies can purchase land at less than its prospective residential use value makes sense because it would enable developers to get hold of land more cheaply and so build more affordable homes. Nor would it be an especially controversial move politically.

Judging by their 2017 manifestos, Labour and the Conservatives think the current system is weighted too heavily in favour of landowners, who see the value of their holdings increase not through their own efforts but through those of others.

Adam Smith and David Ricardo, darlings of the free-market right were critical of the “unearned increment” that landowners enjoyed. So was Henry George, who the left laud for coming up with the LVT.

May should seek bipartisan support for a rethink of the 1961 act. Sure, Conservative-supporting landowners would object but if the prime minister is to make good on her pledge to fix the housing market she has to side with the many not the few.”


“Millennial housing crisis engulfs Britain”

“Home ownership among young families has plummeted across every corner of Britain over the past 35 years, according to a devastating inquiry into the housing crisis facing millennials.

The proportion of families headed by a 25- to 34-year-old that own their own home has more than halved in some regions, showing that the crisis goes far beyond London.

Analysis conducted as part of a two-year investigation into intergenerational fairness in Britain, chaired by a former Tory minister, found that millennials are being forced into increasingly cramped and expensive rented properties that leave them with a longer commute and little chance of saving for a home. It also finds an increasing proportion of the young living in overcrowded housing.

The commission, which has been overseen by the Resolution Foundation thinktank and includes the former universities minister David Willetts, is expected to conclude that new taxes on property wealth may be the only way to restore fairness and prepare the country to pay the care and support costs of an ageing population.

Ownership among 25- to 34-year-olds has plummeted in Greater Manchester from 53% in 1984 to 26% last year. It has fallen from 54% to 25% in south Yorkshire, from 45% to 20% in the West Midlands, from 50% to 28% in Wales and from 55% to 27% in the south-east. In outer London, the proportion has collapsed from 53% to just 16%. Out of 22 regions analysed by the commission, in only one – Strathclyde in Scotland – has home ownership among the young remained stable. It stood at 32% in 1984 and 33% last year, having peaked at 45% in 2002.

Ownership in London has fallen consistently over the past 30 years, whereas rates in some other parts of the country declined more slowly before the early 2000s, but very rapidly thereafter.

Even favourable economic conditions are likely to result in millennials catching up with the home ownership levels of the previous cohort only by the age of 45. Fast-growing inheritances will help some, but nearly half of young non-homeowners have parents who do not own either.

Millennials, classed as those born between 1981 and 2000, are half as likely to own a home at the age of 30 as baby boomers because of higher prices, low earnings growth and tighter credit rules. In the 1980s it would have taken a typical household in their late 20s around three years to save for an average-sized deposit. It would now take 19 years, the analysis shows.

Almost two-fifths of millennials rent privately at 30, double the rate for Generation X, born between 1966 and 1980, and four times the rate for baby boomers – born after the war until 1965 – at the same age.

Millennials are now spending an average of nearly a quarter of their net income on housing, three times more than the pre-war generation, now aged 70 and over.

Their living space is also declining. Each person living in the private rented sector now has on average eight square metres less space than they did in 1996. Meanwhile, those who own their own homes enjoy an extra four square metres each. Since younger households are more likely to be private renters than owners, they now have less space on average per household member. Just under one in 10 households headed by millennials in their late 20s now live in overcrowded conditions.

They are facing longer commutes than older generations endured. If current differences continue, millennials will spend almost three full days more commuting in the year they turn 40 than the baby boomers did at the same age.

The Resolution Foundation says that a combination of an ageing population and an increased demand for services which governments are committed to deliver means that welfare spending looks likely to increase very substantially in the coming decades.

It says that one way of addressing some of the generational implications of tax rises would be to change the age profile that these additional revenues are drawn from. The tax treatment of property and pension wealth may also have to be considered….”