We do wonder about The Observer and economics
This particular claim rather causes splutters:
But land is expensive because the property that can be built on it is so expensive.
No, really, just no. The property, as a property, costs about its replacement cost. £100k to perhaps £200k. Have a look at what the insurance company will pay out if it suffers a sudden dematerialisation event. Property, houses, that’s not where the expense is.
That’s over in the price of a building permit. That planning permission to be able to build a property on that specific piece of land. Again, easy to prove, take the market value of the house as is, deduct what the insurance company will pay in the event of an SDE and that’s the value of the permission. Actual land is £10,000 a hectare which isn’t a number that really matters in this calculation - yes, Mayfair more than that, Cumberland less, but it is the system, the licences and permissions, that costs the money.
Again this can be shown. There was a slice of park in South London which had planning permission as a result of post-WWI decision - anything that had been bombed out had permission. As part of the park it was worth £15,000 according to the local council, the compensation they wished to pay for having incorporated it into said park. With that planning permission it was worth £1,5 million as the courts decided.
All of which makes this useful as an analysis:
“Housing policy is killing British civilisation,” said my interlocutor. “Right to buy has been a social catastrophe, making today’s generation pay for the earlier generation’s bonanza of buying their council house on the cheap – the stock has collapsed because the homes were not replaced. There is too little or no affordable housing or rents in great parts of the country where young people can start or bring up a family.
“It is already hitting the birthrate. Forget building a quarter of a million houses a year rising to 300,000: it is not going to happen with the new planning rules that enthrone the nimbys. This country so safeguards the interests of the old and the equity in their houses, it is literally killing off its future.”
Well, yes. But the solution is to deal with the actual problem - the short supply of those permissions which lead to the high price of them. We can call opposition to it Nimby if we like. The answer is - as it always is with a shortage of supply - to flood the zone with supply. As we’ve been saying in fact.
Issue more planning permissions. Or kill off the need for them even. And watch as the problem of excessive bureaucracy and planning is solved by having less bureaucracy and planning.
Simples.