unlawful, un punished landbanks
james36armstrong at hotmail.com
Fri Jan 6 08:37:18 GMT 2012
I am touting this paper around OFT, JRF, RIBA, RITP MIn of Housing , M.P.s etc etc with a view to getting some support .
unlawful landbanks into houses at accessible prices
1 There is an unprecedented and persistent housing crisis in UK which is
a major detriment to the human rights of individuals in stress of
2 It is caused largely by the
monopoly behaviour of a tiny number
of plc housebuilders who both dominate the supply of houses in UK and monopolise building land in landbanks.
3 Their method is to corner all the available land
suitable for new houses in the UK -landbanking.-and
reduce the supply of houses they build (trickling out) which because of their dominant position
in supply and their oligopoly of land,
ensures the present and continuing fall in
UK house supply .
4 This serves them two purposes. They make more profit from the increase in
land value of their landbanks, than they do on building houses (Barker p77) and
the prices of the fewer houses they construct
and trickle out, increase and yield greater profits at less
5 The UK government is complicit in the failure of supply
. The supply of housing being a major
factor in the UK economy and of
employment and consumer expenditure - the Bank of England, HM Treasury and the Office
of Chancellor explicitly use the housing market
(which comprises mostly the stock of existing houses) as a lever to
manipulate the economy so neglecting the
proper role of houses to provide shelter for home-making and family life. .
6 The specific tool
Governments mis-use is not houses themselves but the availability of finance
for housing.- mortgage debt.
7 This is a major component
of the finance industry.
Promoting this industry in the City of London is another goal of government and central to their balancing – actually
unbalancing- the political economy of UK.
LANDBANKING AND THE SPECIFIC ERRORS IN THE OFT DCLG ,
Evidence OF THE CHARGE THAT
PLC HOUSEBUILDERS LANDBANKS ARE A MAJOR CAUSE OF THE HOUSING CRISIS AND REASON
FOR THE FALL IN SUPPLY O F NEW HOUSES.
8 Self builders
hold zero landbanks . Landbanking
is specifically the product of giant plc long established housebuilders with
market power who use the non availability of ‘other’ building land as a means of reducing supply of new houses, increasing unit returns and land values and pushing
up all house prices.
9 Having failed to consider existing landbanking practices from
the viewpoint of self builders
surveys and conclusions such
as Barker and Calcutt and OFT are flawed . Barker completely overlooked self
The DCLG arguments relying on
the above are therefore also flawed.
10 In addition, because the
evil of landbanking is not identified nor corrected , the most dynamic and “largest
sector of supply”, self build , (OFT 2008 Survey) is
restricted – at the very time when self build could significantly help solve
the nation’s low house supply and out of reach house price problems .
11 Housebuilding has been in decline and house prices in
crisis since 2003 . Government has failed to solve the
crisis. But government has no interest in solving the price crisis and
supply crisis since high house prices achieve (temporarily) the government goals of growth in the economy
via a boom in consumer credit and consumer
12 High mortgages required
for high house prices and easy (reckless) mortgage availability are the
policy of B of E, Chancellor
and HM Treasury. Unregulated credit card
availability, high university fees and ready availability of student loans are
other examples of promoting debt.
The combination of these
factors explains the continued ten year failure of governments to halt both rising house prices and the fall in new house
supply and the rise in land prices..
13 As above , Barker and OFT and DCLG relying on Barker , fail to
see landbanking from the perspective of self builders
- the dynamic sector..
14 There is a complete
absence by OFT and in DCLG in their reports- of
consulting self builders – the sector most affected- on the question of
the evil effects of landbanking.
build in Appx R in OFT is not the same
as considering the implications of landbanking for self builders.)
15 .In contrast DCLG says, in
correspondence to me -
“Developers need a stock of
land to cope with fluctuations in the housing market”
We would ask “Does Wilson
Bowden need 33.8 years supply, Persimmon
19 yrs and Wimpey 16years? (figures from the Barker Review)
How is it that Barratt,
Bellway and Berkely need zero landbanks?
16 How is it that Self
builders need zero landbanks and build
more houses than Wimpey? (which reportedly has 44 subsidiary companies)
17 Why does Barker and OFT
pause to consider the pleadings of
Wimpey on their reasons for holding vast landbanks etc and totally ignore the
views of self builders on Wimpey’s landbanks when self builders require zero
landbank and worse, self builders are
detrimentally affected by these corporate landbanks?
18 The Duchy of Cornwall was granted planning permission for 8,000 new houses
on Middle Farm and Poundbury Farm in Dorchester in 1990.
To date, some twenty years later some 2,300 have been built.
Since the Duchy are not the developers, it is
doubtful if their views on the need to hold landbanks is relevant.
19 What is clear is that
Duchy have a sophisticated house price fixing policy. Each individual house is successively
priced only when completed. This enables
day by day incremental increases in price in conditions of a rising market.
20 Delaying building at a time of huge demand is anti-social.
21 The global UK market for houses is destroyed , demonstrated by
the huge waiting lists, the unfulfilled
demand and people ‘priced out’ and the sustained failure of supply to meet the
demand and the counter trend of supply to decrease in time of increased demand.
22 I offered this evidence of market power used
unlawfully by the Duchy together with sources and contacts, OFT failed to follow up this evidence.
23 OFT subsequently wrote
“there is no evidence that landbanking
is against the public interest “_having failed to follow up the evidence
24 The landbanks surplus to present or imminent
needs of seven named corporate plc housebuilders equate to 731,974 new houses (Barker p 81)
25 Barker at length, and OFT.
quoting Barker advance the spurious
arguments of the plc house builders that planning delays are a major concern
and the cause of failed housing supply and explain the size of landbanks. Can such a delay account for the largest single housebuilders
–Wimpeys’ landbank of 19 years’ supply of land
in reserve at their present rate of building (Barker Table 5.1)
26 Named housebuilding plc’s with £bn
capitalization , lobby government and
are consulted by regulators who personally have no background in house
building and with no practical
construction experience or of finance , or of land assessment or
acquisition of which firms have exhaustive experience in the building
industry over some fifty years, with a
staff of professional advisers who lobby ministers and infiltrate and
brief advisory committees- while the house-needy individuals
who outnumber the errant housebuilders one million to one are not consulted.
27 Any conclusion , that landbanking is a rational
response to the limited amount of viable land being allocated …. Is undoubtedly correct .but fails to reflect
that PLC’s first duty is to their shareholders and their very rational motive
is maximizing profits. In that context
it is very rational –but unlawful .
Monopoly (of building land)
is a rational response to maximizing profit. But happens to be unlawful when
against the public interest.
28 In short if you consider the self builders as
a good representative of the public you will see that landbanking by plc
house-builders is not a rational response to the goal of the welfare of the community. Neither is it lawful when it hurts the community. Using a monopoly (of land locally) is
unlawful when against the public interest …under the Competition Acts.
29 At the heart of the crisis are the unlawful landbanks of the plc
house-builders, as recorded in Barker and advertisied in the Balance Sheets of
giant plc housebuilders, withholding availability of scarce land with
potential for houses in massive amounts from use .
30 OFT although charged with prosecuting unlawful monopoly and
by failing to act are unlawfully complicit in
31 The Government using increased house-prices as a way of increasing
credit availability and stimulating growth in the economy ,are complicit in the
32 The government policy of
stimulating the financial sector through
a) increased ‘asset’ values and
b) promoting the trading of assets
- harms those stressed by housing need. The interests of those in
need are sacrificed to those of the financial sector in the City of London. Welfare is
sacrificed to interest .
OFT and Barker etc consult
corporations and lobby groups and completely ignore individuals..
33 Government complicity explains but does not excuse the reluctance of OFT to carry out their
statutory duty to prosecute unlawful landbanking.
34 Among the available
solutions is for OFT to prosecute land
bankers and fine them in land and sell the land to would-be self occupy self
35 The Premise to the above is that there is a
crisis of supply, the land is in the landbanks of the plc house- builders and
without releasing that land- the same land which has been designated in the
town plans up and down the country for expansion of house supply, there is no
other land on which to build the
required new houses without abandoning
the present rational planning system.
James Armstrong .
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