The Budget

Depends on the planning consent but section 106 money is paid to the authority and spent as and when.

The developer hasn't built any school or hospitals, not even a new surgery. No park but a small play area for children is included.

foxie48

Developers sell in exactly the same market as anyone else so new homes have to represent a similar value. So although they won't (by choice) build homes which don't meet their profit margin, they are subject to the same market forces. They can't just stick up the price of their homes. Construction companies have not had it easy since 2019 and last year alone there were over 4k insolvencies, the cost of building land, higher interest rates and the length of getting planning etc has not been helpful to them.

Homes have a great range of prices an older estate home in need of renovation might only be worth £250k a similar new home with everything new, modern and and fully insulated could easily cost £400k. Added to that location there is always a great range, you pay your money and take your choice

Developers sell in exactly the same market as anyone else so new homes have to represent a similar value. So although they won't (by choice) build homes which don't meet their profit margin, they are subject to the same market forces. They can't just stick up the price of their homes. Construction companies have not had it easy since 2019 and last year alone there were over 4k insolvencies, the cost of building land, higher interest rates and the length of getting planning etc has not been helpful to them.

theworriedwell

ronib

Yes foxie48 I tried to find out which council was involved and failed. But it seems a bizarre way to build 1,500,000 houses. The developers will of course still have a large profit.
If farmland is a vehicle to produce affordable homes, then developers need to take a cut in profits? But of course, developers can’t be forced to build whereas landowners are being made to sell.

The development near me has planning conditions so a proportion of homes are social housing, low rent housing, shared ownership and the rest is for sale as the developer wishes. So developers can be forced if they want the planning permission.

That’s normal, all large sites have “ planning gain” it’s all factored in the houses sold have to pay for the social housing, schools, hospitals, roads, parks and environmental areas.

It’s just another way of taxing home owners, the developers make their profit whatever

foxie48 yes you’re right it’s a section 106. My mistake.

Whatever your conceptions of developers if the are unable to make a profit from building houses they simply will not build them.
They do not need to risk their money to build for us, nobody is going to give them any guarantee, developers gave gone bankrupt in the past. The sites in this area build one batch of houses sell them before moving on to the next project. If the money gets delayed they can’t start. One large developer working nearby was owned by a UK pension fund, recently it’s been sold to a US conglomerate in California.

The bottleneck is planning, once a scheme gets approval in a way that allows a developer to make money it doesn’t take long to build houses.

Ronib "Developers in my area seem to walk off with big profits and find ways to use section 104s to offset obligations"Section 104 covers water and sewerage, I think you mean section 106? Section 106 is paid by the developers to the local authority to cover some of the costs associated with their development and is part of the planning consent, so I'm not quite sure what you mean by developers "find ways to use section 104s to offset obligations."

We have had a great deal of private development in our surrounding villages and small towns. All the houses seem to sell very easily and I personally know several farmers who have made a good deal of money selling off farmland that are within the authorities housing plan. Actually, there's often quite a lot of local opposition to this, so farmers aren't always very popular! However, our lovely health centre was built on land bought from my local farmer, he once joked with me that it had paid for his children to go through boarding school.

I don’t know if farmers will be left penniless or not. It seems fashionable to bash a farmer at the moment.
Developers in my area seem to walk off with big profits and find ways to use section 104s to offset obligations.
I am not looking forward to the loss of fields and the building of about 700 new homes with a very over used and gridlocked road system in my area.
At the same time, I recognise that too many homes are being built and left unoccupied. Developers are advertising flats as investment opportunities in places like Singapore or maybe Hong Kong. (Can’t remember which). There’s a lot wrong with the way housing is allocated in England at least.

ronib

Yes foxie48 I tried to find out which council was involved and failed. But it seems a bizarre way to build 1,500,000 houses. The developers will of course still have a large profit.
If farmland is a vehicle to produce affordable homes, then developers need to take a cut in profits? But of course, developers can’t be forced to build whereas landowners are being made to sell.

The development near me has planning conditions so a proportion of homes are social housing, low rent housing, shared ownership and the rest is for sale as the developer wishes. So developers can be forced if they want the planning permission.

ronib

I don’t think so MaizieD. Under Labour farms, need to make a killing to preserve their farms for future generations don’t you think? How else will they pay inheritance taxes?

They give a share in the farm to their children over the years the children are working on the farm. Sensible people plan.

ronib

It seems that all the local authority did was to give planning permission. A profit of £118.1 million then fell neatly into their lap. As the article explains.
Compulsory Purchase Order is the legal vehicle used. Hope value is the difference in value of land with and without planning permission.
Surely a fair and just society would expect a landowner to have more financial benefit than a planning department?
It feels very unfair. Don’t forget farmers produce food.

Why shouldn't the community have some benefit. In the case where I live the local doctors and dentists said they could not cope with the increase of over 1000 new residents. The schools can't cope so kids travelling further to school, the road even more crowded. Tell me why the farmer and developer should make lots of money on the backs of other people's suffering. If the £100million is used to improve medical and educational facilities, road improvements and maybe limit council tax increases then everyone feels so e benefit which as far as I'm concerned is a good thing. The farmer isn't going to be left penniless and if they aren't greedy that's enough.

I don’t think so MaizieD. Under Labour farms, need to make a killing to preserve their farms for future generations don’t you think? How else will they pay inheritance taxes?

ronib

The NFU is against the compulsory purchase order component of the bill btw. So it isn’t just a biased opinion from Simon Panter.

No, just biased opinion from farmers who want to make a killing...

The NFU is against the compulsory purchase order component of the bill btw. So it isn’t just a biased opinion from Simon Panter.

Also how does the huge uplift in land value (from the granting of planning permission) help build affordable homes? Yes it’s a complex issue. Not helped by legislation going forward to increase compulsory purchase orders .

"It seems that all the local authority did was to give planning permission." Well that's the impression being given but the article does have an agenda so tbh I'd want a lot more information before coming to that conclusion.

Yes foxie48 I tried to find out which council was involved and failed. But it seems a bizarre way to build 1,500,000 houses. The developers will of course still have a large profit.
If farmland is a vehicle to produce affordable homes, then developers need to take a cut in profits? But of course, developers can’t be forced to build whereas landowners are being made to sell.

It seems that all the local authority did was to give planning permission. A profit of £118.1 million then fell neatly into their lap. As the article explains.
Compulsory Purchase Order is the legal vehicle used. Hope value is the difference in value of land with and without planning permission.
Surely a fair and just society would expect a landowner to have more financial benefit than a planning department?
It feels very unfair. Don’t forget farmers produce food.

The relaxation of Green Belt regulations locally has brought a large development plan locally, amid lots of opposition. It is an ideal location with good rail and road connections.

It’s not the best farm land and will not affect the rest of the town other than increasing the population, there will be a fight but to meet government housing targets it will go ahead I
I’m sure.

"Consider one unremarkable 200-acre holding of grade-two arable. Bought by the council at existing-use value, £1.9 million. Sold on after outline permission at £600,000 an acre, £120 million. Profit to the public purse, £118.1 million."

Found it! I have no idea if this relates to the development I am aware of because it is completely devoid of any relevant information!

www.dailysceptic.org
2 December
Simon Panter

Labour’s Plan to Turn England’s Best Farmland Over to Developers is About to Come to Pass

Surely if the value of land is increased because of expenditure on infrastructure by the local authority, that increase in value should stay with the LA? Don't forget, the LA is spending our money and any "profit" is highly unlikely to cover the actual cost of the infrastructure. When developers buy land and get planning permission it often comes with a section 106 agreement, ie a sum of money that the developer will pay towards local infrastructure eg schools, a health centre etc. It is totally in the interests of local communities that LAs approach things in a business like way, why on earth should a farmer suddenly make a lot of money because ratepayers money has eg widened a road and improved access to his scrubby field?

ronib

MaizieD paragraph 5 gives an example. Simon Panter’s article applies. I thought it was an excellent read but you seem to have some trouble with it? Although I am struggling with the idea that a council walked off with £118 million in profit.

I hope it has been used for the benefit of the local community as opposed to farmers pocketing the cash and leaving the community with all the negatives.

CP is needed for infrastructure projects because an obstinate land owner can stop a project, the controversial part is whatever authority grabbing more than they need then profiting from development instead of the original owner.

The landowner gets its market value which he is then liable for CGT he either pays the tax or invests in other land (roll over), he can’t invest in other property without paying CGT.