Thursday, 31 December 2015

Good work by Shelter on land banking.

Somebody at Shelter has trawled through the accounts of all the large land bankers home builders and confirmed what we had already guesstimated.

From The Guardian:

The government wants to build 1m new homes in England by 2020. This would mean building 200,000 a year, but the existing construction levels of just over 150,000 are well behind that.

Despite the fact the nine listed housebuilders hold more than 600,000 housing plots, they sold just 66,881 homes between them in their last financial year.

The annual figure of 150,000 is not unduly low by historic standards, the average since 1945 is about 160,000 private sector completions. The years when annual completions were nearer 300,000 was because of council house building.

What is interesting is comparing what their PR people say to the media with what they say to shareholders in their annual reports:

Taylor Wimpey also pinpointed the “slow and complex” planning process and said all sides of the housing debate needed to be patient if more homes were to be built. A spokesman said… "Whilst it is improving, the planning process is slow and complex and a number of conditions need to be fulfilled before development can commence on our sites. A shortage of resources in planning departments also often means that delays occur in this process."

Ho hum. From their 2015 interim report (download from here):

Land bank - movements in period

Brought forward +75,136
Plots acquired +3,620
Strategic land conversions* +5,666
Completions -5,898
Land sales -297
Scope changes -655
Balance at end of period =77,372

Planning status
Detailed planning +45,787
Outline planning +22,508
Resolution to grant +9,077
Total =77,372

So in their accounts they boast that they have enough land with planning for about six years' construction.

* The land bank figures only include land with planning. It does not include 'strategic land' which they bought on spec; in this period they managed to obtain planning for 5,666 plots of 'strategic land' which is transferred to their official land bank.

To cut a long story short, TW have no interest in getting planning any faster, their profit maximising output level is whatever it is and there is no incentive to build more; in turn, there is no point in getting planning permission for land which they have no intention of using for the next seven or eight years.

Monday, 7 December 2015

Fun Online Poll: which is the best measure of poverty or inequality?

Further to point 6 of Ben Jamin's recent post

Which is the most relevant measure of poverty or inequality:

Total income
Total assets
Total assets excl. value of main residence*
Total income minus tax and housing costs

There's no "other" because we'd just end up with endless permutations.

Vote here.

* The third option might sound a bit weird, but is the basis for many means tested benefits. For example, if you have a low income but £16,000 or more cash/investments, you get no Housing or Council Tax benefit or Pensions Credit (or their localised replacements and I know that the rules are slightly different for each and there's a Pension Credit Savings Credit to mitigate this). But if you have a low income, no savings and live in a £1 million home, you can still claim Council Tax Benefit and Pensions Credit.

To sum up: a tenant with a low income and £16,000 savings can fuck off, he is not considered to be poor. A home-owner with a low income and no savings and a £1 million house is a charity case and gets all the goodies.