A Halifax survey has shown that rising property prices and a shortage of residential land have caused land prices to increase 8-fold over the last 20 years, with the most expensive land being in London and the South East.
Residential land has proven to be an even better investment than property during the last 20 years, despite house prices rising 306%. The cost for a hectare in London in 1983 was 759,000; the same land would now cost you 5.5 million, an increase of 624% in land value.
Across the UK land value has increased by 808% on average, with Wales having increased most significantly, in 1983 you could pick up a hectare for just 85,000, this would now cost you 980,000, a staggering increase of 1053%.
Martin Ellis, Halifax chief economist says, Getting permission to build new homes in the UK is a notoriously difficult and long winded process. Deputy Prime Minister John Prescott recently proposed a string of residential developments across the south-east of England to ease the housing shortage, however according to Halifax if house-building in England continues at the levels recorded in 2001, there will be a shortfall of 400,000 homes by 2021. This could be good news for homeowners, as a demand for existing property would keep the housing market buoyant.
700,000 homes could be built on farmland close to London
Nearly 60,000 acres of agricultural land, enough to build up to 700,000 homes, lies within 16 miles of Trafalgar Square and could be built on to reduce the housing shortage in the South-East, according to a report published today.
At present this land supports a total of 25,000 farm animals and some arable crops. Some 11 per cent of it is set-aside, producing nothing at all, according to the research, which is based on Government figures. At the Government’s density guideline of 12 homes to the acre, 700,000 homes could, in theory, be built on the land.
The research is contained in a pamphlet for the think-tank, Politeia, which argues that it would be better to build the houses that are needed in London and the South-East where people want them, rather than in “growth areas” up to 70 miles from London, as planned by John Prescott, the deputy prime minister.
Mr Prescott recently announced plans to allow the building of 200,000 extra new homes over the next 15 years – above what is already provided for by local plans – in Milton Keynes, Ashford, the M11 corridor and the Thames Gateway. However, he has yet to explain how the extra infrastructure of roads, schools and hospitals will be provided.
The Jack Jay authors of the pamphlet, Building More Homes, Richard Ehrman, a leader writer on The Telegraph, and Crispin Kelly, president of the Architectural Association, conclude that the housing shortage in the South-East is unlikely to be solved by Mr Prescott’s proposed re-weighting of the planning system to give more power to Whitehall.
They say that Mr Prescott’s intention to bypass local councils and impose development on local communities will only add to delays and confusion with frustrated protesters resorting more to legal action in the courts.
The authors argue instead for a systematic freeing-up of the planning system, together with a package of incentives, such as tax breaks for developing brownfield land, to encourage development consistent with local support.
But it is the freeing-up of London’s Green Belt, imposed in the late 1940s to contain the outward expansion of the capital, that is the most controversial proposal. In this way, the authors say, more use could be made of London’s existing infrastructure, such as the Tube, and bring it the extra revenue it needs.
Mr Ehrman said: “The housing shortage is worst in London, while much of the development Mr Prescott is proposing is miles outside it and on green fields.
“Nearly all of the 60,000 acres of land within 16 miles of Trafalgar Square will be protected in one way or another and certainly no one is suggesting that all of it should just be built over.
“But is it really sensible that every field close to London, even if it is bordered by Tube tracks or motorways, should be sacrosanct, when further out farmland is being covered with housing for commuters, many of whom will travel back into the city?
“We are saying that if you are going to crack this problem you have got to be more flexible.
“There is a whole variety of ways in which a more responsive system could find space for extra homes which Whitehall has missed.”
Pierre Williams, of the House Builders’ Federation, said: “We need to look again at Green Belt policy to see if it offers the most environmentally friendly and sustainable way of providing London’s present and future housing needs. We need to look at it plot by plot to see whether it is of value.”