...a blog by Richard Flowers

Wednesday, June 20, 2007

Day 2357: Sir Mr the Merciless Million Mansion Mission


Mr Colin (and the BBC) tell us that Sir Mr the Merciless has a new plan to build a MILLION houses.

Some people, like Mr Dale Winton, have suggested that this is DANGEROUS MADNESS. But I remember that DOCTOR WHO was working on a building site when he got the news that he had been cast as TOM BAKER, and HE is over 700 years old, so this proves Sir Mr the Merciless is certainly not past it, if he want to go out and start building!

We all know that house prices are out of control. They have probably DOUBLED since I started writing this sentence, young families are having to promise the eternal servitude and of their children, grandchildren and great-grandchildren in order to get a starter mortgage.

Huge debts make people vulnerable to interest rate movements

when even small rises can be cripplingly expensive, and do not even THINK about getting a new job if it means moving house, particularly if you are a nurse, teacher, fireperson, police person or any other worker BASICALLY VITAL for the community.

Now, if I have this right, this HUGE problem in the housing market is because it is not a proper FREE MARKET! Prices are HIGH because there is a lot of DEMAND but not enough SUPPLY. This ought to have people rushing to build new houses while they can get a good price for them – which would increase the supply and prices would go back to normal. But instead there is a LOGJAM in the form of PLANNING.

Local Councils are responsible for making decisions about who gets planning permission.

Someone in the government TELLS them what houses they need to build – it used to be the Minister for Magical Accidents, but now it is the Minister for Setting Community Against Community, Mr Ruth Kelly – but it is the council who have to decide.

This means that they have to take the FLAK for agreeing to turn meadows into maisonettes and estuaries into council estates. But the BENEFIT – the capital gains tax that the lucky farmers pay when their fields gain that planning permission – that benefit by-passes the council and goes straight to Mr Frown in his treasury lair.

Oddly enough, this makes the council drag its feet over implementing schemes that will only cause it grief.

There are BIG BUCKS involved here. Especially in BUCKS. And HERTS, and other counties in the southeast. Planning permission to turn agricultural land (average value £7 thousand a hectare) into residential (average value £3 MILLION a hectare) is obviously worth squillions.

Well now clever Mr Tim Leunig has come up with a policy proposal that will allow the local councils to SHARE in the profits to be made from turning unused land into much needed housing.

Basically, the idea is to let the council be the middle man – people with land that they WANT to sell for development can offer it to the council at the price of THEIR OWN CHOICE. Mr Leunig suggests that they might ask for something like five times what it is worth as it is without planning permission. Then, the council can pick the bits of land that are in the best place at the best price for them and the people they represent. The council buys the land and sells it on to the developers who want to build houses. The land owner makes a profit, the council makes a profit and the developer makes a profit. Even Mr Frown still gets some tax.

The council can then COMPENSATE local people for the change to their town or village by building new facilities or lowering their taxes.

It is still not perfect – for example the Man from the Ministry STILL decides how much housing the council OUGHT to be building – but it is A GOOD BIT FAIRER.

So obviously Conservatory Mr Dale Winton calls the scheme "Madcap"!

He thinks that it is OUTRAGEOUS that the land owner should NOT GET ALL of the millions of pounds of profits.

Hmm. If you call selling your land at "only" FIVE TIMES its current value a "knockdown" price then clearly YOU have been knocked down by a car and woken up in the GREED IS GOOD part of the Eighties, Mr Winton!

Of course it is not quite a 42,000% profit, but where I come from, a 400% is still considered QUITE DECENT.

Mind you, I suppose we should not be surprised at a Conservatory panicking at the sight of an actual policy.

The planning laws clearly need some looking at. Councils need SOME powers in order to protect local citizens from rich and powerful developers riding roughshod over their rights to enjoy where they live, but too many of those powers have been SNAFFLED by central government as part of the Labour's COMMAND ECONOMY approach, and it is time to give some freedom BACK.

For some other Liberal perspectives on this:

The Norfolk Blogger didn't like it

The Clowns to the left of me had a couple of questions

While Mr James thinks the policy could have been better launched.

1 comment:

Tim said...

"It is still not perfect – for example the Man from the Ministry STILL decides how much housing the council OUGHT to be building – but it is A GOOD BIT FAIRER."

Not true! Under this scheme the Man from the Ministry gets no say at all - it is up to the council to decide how many (if any) houses (etc) it wants to allow to be built.

Does this clarification make the scheme "perfect"?

The Tories have adopted it as policy as well as us. Kate Barker also called on the govt to pilot it, in her report for the Treasury.


PS Nice to be called clever!