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All the time our parents were paying off and living in their homes the market was going mad. That is the fault of a system prepared to lend five times earnings on more than 100% mortgages.
---------- Post added at 01:04 PM ---------- Previous post was at 12:27 PM ----------
Originally Posted by
Waterways
The problem was the planning system - only 7.7% of the land in the UK is settled. This created an artificial land shortage ratcheting up land prices. This put houses out of reach of low income people, meaning the state had to intervene. But they were also strapped by the same constraints, so cheap and nasty estates appeared.
All because of planning and land.
Accepting your 7.7% as settled for a second, that percentage may not be the percentage actually needed to sustain the population, have work, grow food, have transport, leisure, moors, mountains and other ‘un-settlable’ land. However, I think anyone who argues that this is not a crowded island is on distinctly shaky ground.
And the history of the post-war expansion into the countryside doesn’t back up a suggestion that land shortage increased prices or that there was a land shortage. Ok, the Lords Sefton and Derby did alright out of it I’m sure but the ensuing prices wouldn’t suggest that the price paid for the land was too high or that there wasn’t enough of it. The housing estates designed are of very low density (too low, possibly)
A higher density would have allowed lower prices, certainly. But too high a density would have put us back where we started - in the slums.
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Notwithstanding that, there are 64,000 Hectares of 'brownfield site' in the UK. Estimates of what that might accommodate vary hugely, dependent on density. But are anywhere from 2m at low density (outer suburban Woking) to 17m in inner city London. That's not so much of a shortage as yet.
[incidentally - I should also mention that tower blocks have no higher density than two storey houses. The 'parkland' around the towers means the densities are about the same. Since they both use the same amount of land, tower blocks reduce cost of construction per dwelling, not their portion of the land value per dwelling]
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State intervention via the various Housing Acts originated in the economic drivers behind early 20th century slum conditions ie., because people were paid so little, they couldn’t afford much. Not even the fare from places like Huyton, let alone the house.
You might say that the history of social housing has thus been about propping up the ability of poorer people to pay for decent homes.
Now, all the props are... not quite gone and we have had raging house price inflation fueled by irresponsible banks. That has been the major driver of higher prices. Not land shortage.
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