rss feedStarter homes for less than £20K
Starter homes for less than £20K.
“it’s not my bricks and mortar that’s gone up in value, it’s the
permission I have to have a house in my particular Street”
A cheap starter home from Poland
At agricultural prices a plot big enough for a house with a reasonably sized garden costs about £1000. A starter home, the M2, shown in this second video, can be bought from Poland for about £10,000 [1]. There are other options this cheap.
Add a £(a few thousand) for connections and external works and a starter home for under £20,000 looks possible. Given our housing crisis why doesn’t that happen?
The answer is a simple one that few want to talk about. It’s the way that the planing system operates. Planning permission is kept in short supply to the benefit of home owners and the land owners.
Planning permission permission raises the cost of housing
In York, the value of a building plot raises from £1,000 to nearly £200,000 when planning permission is granted. That’s before any building work starts. The York Local Plan, currently being considered, has a limit of less than 15,000 new houses in the next 20 years or so, much less than the potential demand. This limit keeps the value of planning permission high, very high
Homeowners and landowners get large windfalls
I have estimated that the value to landowners of the planning permission in the plan to be £2.5 billion – enough to build 10 new hospitals, 150+ secondary schools or buy 10,000 new Bentleys. However, home owners may benefit more: in the past 20 years the value of dwellings in York has risen by about £10 billion.
Landowners and homeowners benefit from the present restrictive planning system leaving those who must pay rent with ever increasing housing costs. It’s just not right.
[1] According to the video, the Polish M2 house is 25 square metres and costs $525 per square metre. That adds up to just over £10,000 at today’s exchange rate.
Further reading
- Prejudices and housing: Prefabs
- Prejudices and housing: The shack
- Recommendations for the York Local Plan
- Planning permission is not a natural resource
- What would the Bank of England do if new housing were cheap?
Tweets
Small scale housing
Housing for the homeless
Ban these to save our blushes?
