Frequently it is the wrong causes which are blamed for the cost and scarcity of housing. (Immigration, population growth, the green belt, red tape)
In reality the main underlying issue is land.
Its ownership and control by a small number of people gives rise to distortions every day. Homes have become so expensive not because the price of bricks and mortar has risen, but because the land that underlies them now accounts for around 70% of their price.
Successive governments have used tax exemptions and other financial advantages to turn land into a speculative money machine. Landowners and building companies, and the vast shift in bank lending towards the housing sector have inflated prices so much that even a massive housebuilding programme would struggle to counteract them. Worse still, when planning permission is granted on agricultural land, its value can rise 250-fold.
This issue needs to be put at the heart of political debate and discussion. New public development corporations, alongside local authorities, could assemble the land needed for affordable homes and new communities.
To read more on this download CPRE’s briefing, below.
Wiltshire Council has incorporated a new limited company, Stone Circle Development Company Limited, which is apparently going to be used to develop council owned land, or acquire it if not owned. So far the sites mentioned are in Marlborough, Wootton Bassett and Devizes . The latter, at Horton Road, to be for employment purposes. But questions should be asked whether the Company will be involved in the redevelopment of county farm land, of which there is still a considerable amount around in Wiltshire.
Such land normally lies on the edges of urban settlements which are the areas most likely to be allocated for development. An example could be those farms which lie to the eastern side of Chippenham where the Council intends to build a new road funded by the Housing Infrastructure Fund.
Will the Council use this Company to build the Social and truly Affordable housing which is the greatest need in the County? A return to the pre-Thatcher council house building programmes which were swept away by the Conservative government post 1981 and replaced by the encouragement of the property owning democracy model with developer built private housing.
Over a million council homes were sold to their tenants nationwide during the 1980s and 1990s and this loss must be redressed.
If the Council land is valued at prices close to the existing agricultural land value then more houses could be built at a price people can afford to rent or buy. The inflated cost of land, which with the granting of planning permission drives it to unaffordable levels, is the root cause of house prices. The planning gain flows to developers and landowners not back into delivering the most needed type of housing.
This dysfunctional speculative land market leads to less affordable housing. Will Wiltshire Council tackle the problem with its new company?