Interesting that land promoters have been attracting attention in the very mainstream media. Isabelle Fraser had a very good piece in the Daily Telegraph last week on their activities. Despite the rather melodramatic title of the piece, it seems pretty well balanced and informed. I’d have a few quibbles.
It accepts rather uncritically the Shelte-ish comspiracy theory that there’s some type of oligopolistic collusive behaviour here that is pushing up house prices.
… by charging a premium for a clean site that’s ready to be built on, it forces developers to increase house prices to recoup the high outlay on land, while cutting the viability of building affordable homes.
“Land promoters deliberately pump the cost of land higher and higher, then reap the rewards when they sell it,” says Catharine Banks, policy officer at Shelter.
In reality, land promoters don’t control land prices and house builders don’t control house prices. Don’t get me wrong, generally promoters, land owners and house builders will typically want land and house prices to be as high as possible so that they make as much money as possible. If Taylor Wimpey could sell their houses for 100% more, they would…but prices are set by complex mechanisms of supply and demand. It’s not a perfect market by any means – but I think that the pricing power of these groups in a fairly competitive market is exaggerated. It’s a bit like blaming estate agents for the price of housing – they must really ruthless and clever in Kensington, Westminster etc. It just distracts from the underlying structural problems in the ‘broken’ housing market
I’m also surprised that
Last year Gladman sold 10,000 plots over 50 sites on the edges of towns, mainly to SME housebuilders,
Given that the typical SME builder produces under 20 houses a year, then it means that Gladman are dealing with hundreds of small land sales.