Proof- CAP causes houseprice rises?

james armstrong james36armstrong at
Sun May 9 20:44:00 BST 2010

I have asked Office of Fair Tradiing to investigate thefollowing.. This defra web site traces  a possible
direct connection between CAP and high house prices.  Taylor Woodrow and Wilson Bowden, two of the
very biggest housebuilders and who the Barker Report listed in 2003 as holding
giant landbanks of permissioned or potential building land- are listed as
receiving CAP payments. You may not have associated these builders with agri-culture-and
 you may be right!

 The implication is that CAP rewards builders
for hoarding surplus permissioned land so that they can charge monopoly prices
for the scarce houses they build (Barker calls it ‘Trickling out’) while
receiving a further double reward, -once from CAP and again as the national scarcity
 of houses  drives up the value of the undeveloped land. I
count that as three bites of the forbidden fruit called –“monopoly”

 The amount and value of their  ‘landbank’,  
is advertised in the  annual
balance sheets.of the big national builders.

Finding CAP payments to  housebuilders   establishes a direct causative connection
between CAP and rising house prices.       
The House-builders’ landbanks are listed on page 81 of the  Barker Review of Housing Supply 2003. see www.//  for cap 

Builders buy agricultural land for
its potential as building land. It jumps in value (the windfall gain) the day
it receives permission for development (even when the cows are still grazing on
it)   A typical increase in value is X
125. Bulk land under Taylor Woodrow and Wilson Bowden ownership is likely to be
potential building land. 

There is a more subtle and
sinister  implication. In order to qualify
for CAP payments you must apply in advance , and commit the land  for a certain number of years (5?) to a
specific agricultural use. In other words there is no immediate or imminent
intention of using such land for building houses.  This demonstrates an institutionalized
attitude to withdrawing land from potential building use – a clear indication
of creating a monopoly of the worst 
sort. (Using a monopoly against the public interest is punishable by
large fines by Competition Commission) 
This is an indication of the need for defra to use the existing compulsory
purchase powers of the planning laws to release land earmarked for
housebuilding to self builders who are only too keen to  solve their own (and the nation’s) endemic
shortage of houses at accessible prices.


James, Dorchester
9 May. 		 	   		  
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