Should unused land be compulsory purchased and resold?

[nmb]

A number of critics of the capitalist system have suggested that unused land should be compulsory purchased by the courts and resold to those looking to develop houses. Is this really feasible? What would this do to sentiment in the investment markets? Why would anybody invest in land if there was a chance it could be compulsory purchase?

 

[kchiggs]

Works pretty well in Germany.

Although there land is purchased before it is given development permission, so most of the uplift goes to the council who then spend it on trams and such.

 

[lookinginvest]

I dont think the authorities can make best use of a free market economy and then look to cherry pick the bits they want to control. If the authorities started reclaiming unused land this would add another risk to investing in the UK which would mean investors demanding a greater return on their investment. Prices would either need to fall or overall investment would fall.

 

[kchiggs]

Of course if investors where looking elsewhere for their returns, and prices were falling. Then more people would be able to afford homes. If that is better or not probably depends on your political leanings. Those people struggling to get on the home ladder won't care if investors profit fall, and if more houses start getting built, lowering the value of current homes. Everyone on a mortgage might. If housing supply kept up with demand there would not be enough renters to go round. All those BTL mortgages would collapse or the houses would have to be sold off to pay the outstanding value.

 

[kchiggs]

Another option is to copy Estonia(82% occupier-owner homes) charge tax on unimproved land, so holding the land eats into the developer profits. That way the way to make profit is to build homes as fast as possible. Which is probably why they can build houses sin 24 hours

 

[nmb]

I see what you are saying but many developers hold land for years - I dont think they would appreciate paying to hold undeveloped land. Also, any additional charges would just be passed on to their customers.

 

[kchiggs]

No they wouldn't appreciate it, that's kind of the point. If it is not an encouragement for them.to sell it on but just add price to customers that is one argument to take land and get it self built. Simply adding the price to customers is not what happens elsewhere in a land tax system. What special circumstances exist in the UK to make you think it won't work like it does elsewhere? Alternatively you could simply allocate enough other options.. If supply is high enough that land becomes.worthless for habitation

 

[lookinginvest]

If the cost of retaining land increased and the cost of the average UK home was to fall then, assuming labour and material costs remained constant, construction companies would see their margins squeezed. This would no doubt lead to many leaving the more affordable end of the UK housing market. I for one would not trust the government of the day (any day) to be in charge of building houses in the UK if the private sector was not able to supply enough affordable new builds.

 

[kchiggs]

, assuming labour and material costs remained constant, .

False assumption. The video above shows that a house can be printed with minimal labour. . One (unattended) robot produces one house in 24 hours. It only needs to be relocated to each site, and refilled. Material costs is arguable. There are many other options too, the biggest cost of homes is the land not the building material/labour(if it came too it people could team up and build their own homes) Factories in Germany will deliver entire 2 bed flats at €20,000 plus delivery.

 

[nmb]

Good point but if it is so simple, why are we not using these systems in the UK today - well at least to a level where anyone is even aware of them being used?

 

[kchiggs]

Good point but if it is so simple, why are we not using these systems in the UK today

Did it in '64 under Harold Wilson, when the political will was there. (four times as much housing built in one year as the previous government.)

Because it would hurt the current politicians. A large segment of house owners are in favour of conservatives because house prices go up when they are elected. Easiest way to keep valuations up is to constrain demand. Lower valuation would also mean lower council tax. In the last election labour's manifesto did propose scrapping council tax for land value and more homes. This would end the financial imperative however they haven't previously, this is presumably due to how left corbyn is.So they should of got votes form non-home owners however that means less valuation for home owners. Affordable housing means that there has to be a crash in current valuations or wages have to rise massively. Basic supply and demand. A look at mobile phones is instructive, there was no political motivation. So originally they cost about £4000 a pop. Now there are so many that they are given away wto get people to get the contracts(where the value is)

 

[nmb]

Its a shame that political parties are allowed to influence the housing, left or right leanings, but then again they make the rules when in power so what chance have we really got? When you consider that a home is likely the largest investment for 99% of people they obviously want to maintain values as much as possible - but at what cost in the long term?