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France plans to nationalize land


Dave Bloke

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A bill is currently traversing the French parliament with the aim of controlling house prices. French technocrats have long dreamed of introducing a LVT but it has been difficult to persuade the French property owner to pay rent to live in his own home. The idea is that house prices are driven by land prices, when land becomes available the price is bid up by developers and it is that, that makes housing more expensive. In future land would belong to the state and would be made available to developers to build on for free. Owners would buy the house and pay a rent to the state for the land. It is not clear what would happen to existing housing or why a individual's ability to borrow would not drive up the cost of houses despite the cost of renting the land.

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9 minutes ago, spunko said:

What a load of shite. Are the gilets jeunes suitably infiltrated now then?

Anyway, French house prices look positively cheap compared to here. 

I wish, I was comparing prices where I live in Grenoble with South London and the difference isn't huge.

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Chewing Grass

All shit taxes were dreamt up by the French, anyway can't see how that would fit in with the plans for the 4th Reich.

Then again if it were to pass than all the land by default would be the EUs by default.

Herr Merkel we have a plan and Gruppenführer  Macron has it all under control.

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34 minutes ago, Dave Bloke said:

A bill is currently traversing the French parliament with the aim of controlling house prices. French technocrats have long dreamed of introducing a LVT but it has been difficult to persuade the French property owner to pay rent to live in his own home. The idea is that house prices are driven by land prices, when land becomes available the price is bid up by developers and it is that, that makes housing more expensive. In future land would belong to the state and would be made available to developers to build on for free. Owners would buy the house and pay a rent to the state for the land. It is not clear what would happen to existing housing or why a individual's ability to borrow would not drive up the cost of houses despite the cost of renting the land.

They are coming for that last bit of wealth held by ordinary people. You can bet the farm that there will be loopholes for the rich. 
 

they will not be happy until we are all surfs again. 

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14 minutes ago, One percent said:

They are coming for that last bit of wealth held by ordinary people. You can bet the farm that there will be loopholes for the rich. 
 

they will not be happy until we are all surfs again. 

Pensions and houses... that's about all that's left now.

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The thing is, it just sounds like the French have invented leasehold properties. I can't see there being much of a positive effect on house prices.

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4 hours ago, Dave Bloke said:

A bill is currently traversing the French parliament with the aim of controlling house prices. French technocrats have long dreamed of introducing a LVT but it has been difficult to persuade the French property owner to pay rent to live in his own home. The idea is that house prices are driven by land prices, when land becomes available the price is bid up by developers and it is that, that makes housing more expensive. In future land would belong to the state and would be made available to developers to build on for free. Owners would buy the house and pay a rent to the state for the land. It is not clear what would happen to existing housing or why a individual's ability to borrow would not drive up the cost of houses despite the cost of renting the land.

That's a nonsense argument that could only be invented by civil servants.

The price of housing is set by the ability of people to pay, and that is set by interest rates.  They could invent super cheaply specified, robot built houses on free land, and they'll still cost all your money and then a little bit more.

[well, apart from in socialist countries, in which the price of housing is set by your ability to toe the party line.  Maybe France is deciding to go that way.]

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57 minutes ago, Tdog said:

Sorry but this is nonsense, if people were allowed to build on any plot of land they desired then the prices of new build housing would be land cost (0.07 acres costs f all)+ build cost + profit for builder.

So a 3 bed could cost somewhere in the region of 70K.

Cost of lending only applies when there is limited supply.

Besides our government uses tax payers money to make land as expensive as can be by stopping people building with endless laws and the threat of prison, if the French do the opposite then good luck to them.

No.  The builder (as the only entity left possible to set prices) would just take more profit until there was no money left.

The only way prices would come down would be to mandate through law that builders could only make so much profit.

The price of nearly all goods is the price that the market will bear.  Very very few goods or services are priced at cost+profit.

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3 minutes ago, dgul said:

No.  The builder (as the only entity left possible to set prices) would just take more profit until there was no money left.

The only way prices would come down would be to mandate through law that builders could only make so much profit.

The price of nearly all goods is the price that the market will bear.  Very very few goods or services are priced at cost+profit.

Well apart from housing and the government is using every trick they have to keep thoses prices inflated. I bet it is no different in France 

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9 minutes ago, Tdog said:

If profits were so vast more people would become builders and profits would be comparable to the difficulty of entrance to the market, aka capitalism. (or people would self build)

Building houses is not difficult, finding affordable land (in relation to wages) with planning permission is.

I agree that currently with the rigged land market that the price of debt is what sets the price of housing.

 

The value of the land is set by what people are willing to pay, because if the expected price is lower than the offer price, the landowner will simply not sell (excluding compulsory purchase). Therefore the price of the land is set at whatever someone is willing to stump up for it, effectively.

You won't find someone willing to sell a plot of land for a tenth of the 'market value', and the reason that this market value is so high is because of limited quanity. I don't know if you're aware but of the 50 biggest landowners in the UK, all of the big housebuilders are listed (and that's when you exclude leasehold). They sit on land and slowly develop it to maximise profits and to not flood the market, as they know that supply can easily outstrip demand. All this guff about pent up demand for housing could resolve itself with a government that prevented landbanking by housebuilders, and a return to sensible interest rates.

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17 minutes ago, Tdog said:

If profits were so vast more people would become builders and profits would be comparable to the difficulty of entrance to the market, aka capitalism. (or people would self build)

Building houses is not difficult, finding affordable land (in relation to wages) with planning permission is.

I agree that currently with the rigged land market that the price of debt is what sets the price of housing.

History suggests that as profits became higher the industry would self regulate in some way to stop new-entrants (whether by 'guilds' or by changing the skill requirement as a barrier (eg part-p)).

Even without this 'self-regulation' effect, as prices reduced (according to your theory), people would just spend more money to pay the builders to get a more palatial place.  While this is 'nice' (more room for same money), it would end up with the available builders being more stretched, and use up more land, so that you'd soon enough end up at another equilibrium point where people were spending all their money plus a little bit to get their accommodation -- people at the bottom of the chain would still be getting a small place because the wealth at the top of the chain would be buying more builders to get their grand palace together.

The fact is that houses have always cost 'all your money' (which works out as about 30-40% of pay for the average person).  This was true before planning restrictions were introduced.  Before mortgages that would be 'how much money was saved', and as mortgages were introduced the price changed to 'how much money was available per month to cover the debt'. 

The trouble with housing isn't how much it costs (although it feels that way).  The problem with housing is that successive governments have made it ever easier for a) (ever greater numbers of) feckless people, b) property speculators (inc BTL) and c) pensioners staying in their family houses to compete against normal middle class workers for the available properties.  

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18 minutes ago, spunko said:

I don't know if you're aware but of the 50 biggest landowners in the UK, all of the big housebuilders are listed

I assume you mean by value rather then hectare?

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1 hour ago, Wight Flight said:

I assume you mean by value rather then hectare?

No, by size. Take a look here, it lists a few of them:

http://tlio.org.uk/the-uks-50-biggest-landowners-revealed-lovemoney-com/

Build rate is typically 30 dwellings per hectare.

So 5665 hectares for Taylor Wimpey = They could build 30 x 5665 = 170k houses with current land reserves.Enough for half a million people.

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This is only on the second page of this section of the forum.  

“We find that the rise in real house prices since 2000 can be explained almost entirely by lower interest rates,” the authors write. “Increasing scarcity of housing has played a negligible role.”

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54 minutes ago, Tdog said:

We have planning laws to make housing as expensive as the land owning backed govt can possibly get away with, and to transfer wealth from the plebs to the few percenters.

OK so working people have got to be priced out of owning a simple house to avoid being selfish. And i've got to hand over most the money i will earn in life to a landowner just to avoid being selfish. 

I'm suggesting the state should have to find good reason for people not to be able to build on land they own. Obviously a little bungalow directly off the M1 is a bit daft.

But its like dealing with my ex, the consensus on here is to mock the French govt for being socialists for wanting to nationalise development land and make it cheaper as socialism is bad .. but then the consensus want the British govt wholly involved as they currently are in stopping people build on land they own which makes land absurdly expensive. But obviously the British way where the govt chooses who can do what with land isn't socialism.9_9 

If i was a farmer i could put up a building tomorrow for animals or horses with no planning permission needed, but its not the case for humans. 

 

I want house prices to crash by 75%+ in real terms, but you're focussing on the wrong issue. Yes, it's selfish to build what you want, where you want, there are other people to consider who live nearby who have a right to privacy, not be overlooked, and so on. The idea that everyone within a few miles has to suffer simply so you can have a house is obviously a selfish one. Anyway, the planning laws in this country will never be relaxed to the extent that it'll allow anyone to build anywhere. It'll be a complete political hot potato and there isn't a developed country on earth that allows an "anything goes" planning policy, for good reason. Other countries manage their housbuilding responsibly, without resorting to such extreme measures, why can't we?  Even Corbyn won't let something like that happen.

I agree that the government aren't doing enough to make housing affordable. The problem as dgul said is affordability, if you were to set reasonable interest rates at their natural level then BTLers would crash and burn, the feckless would crash and burn, and lending would revert back to 4x income. It is an inevitable outcome, and almost happened in 2007/2008.

The other option is to lower the demand through population reduction, but nobody wants to go there, even on here.

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54 minutes ago, spunko said:

The other option is to lower the demand through population reduction, but nobody wants to go there, even on here.

Don't be so sure.

I would be happy for the population to slowly revert back to 50m or so.

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1 minute ago, spunko said:

50m for the UK? Or globally?

Uk.

Globally could probably do with an even bigger reduction in % terms - but I will wait for the green brigade to finally wake up to the fact as I don't think it will affect me in my lifetime.

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8 hours ago, dgul said:

The price of nearly all goods is the price that the market will bear.  Very very few goods or services are priced at cost+profit.

Yeah very few apart from .... pretty much everything except housing which has an artificial scarcity premium. While its true that you cant really stop people competing for housing, what you can do is ensure that competition increases the square footage per £ by making much more land available for it.

Also peoples willingness to spend "all their money" on housing is because once you have bought it the ongoing cost is relatively small which is why the french are right - house prices will fall when land moves from a one off up front cost to being something that you have to pay for on an ongoing basis, this changes the investment profile of housing so that people buy enough to live in rather than speculating.  Google "georgism".

Another way to dampen speculation is to keep rents as a low as a possible, with and have very strong tenants rights, as they have in Germany.

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On 07/11/2019 at 17:54, One percent said:

They are coming for that last bit of wealth held by ordinary people.

The last bit of wealth held by the current generation of ordinary people because your kids (and their kids) will get fuck all due to your generation pulling up the ladder behind them.

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1 hour ago, goldbug9999 said:

Yeah very few apart from .... pretty much everything except housing which has an artificial scarcity premium. While its true that you cant really stop people competing for housing, what you can do is ensure that competition increases the square footage per £ by making much more land available for it.

Also peoples willingness to spend "all their money" on housing is because once you have bought it the ongoing cost is relatively small which is why the french are right - house prices will fall when land moves from a one off up front cost to being something that you have to pay for on an ongoing basis, this changes the investment profile of housing so that people buy enough to live in rather than speculating.  Google "georgism".

Another way to dampen speculation is to keep rents as a low as a possible, with and have very strong tenants rights, as they have in Germany.

Well, it's clear we've got a fundamental difference of opinion, but I'll make one more comment on the bold.

  • The way we buy housing is that land is effectively paid for on an ongoing basis, as it is paid (sure, 'one off cost') with a mortgage.

I do agree with you that one of the fundamental problems we've got is speculation, but I disagree about the solution -- the French solution puts far too much power in the hands of the state, whereas I'd prefer the state to have less power.  There are other easier ways to reign in speculation.

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