BUILDING LAND PRICES from an economics correspondent
It has been romarked that land prices are the fast rising clement in building costs and, therefore, in the cost of houses. A recent supplement to the Financial Times contains an extensive oxamination of the whole housing set-up and among the articles theroin, ono by J. Switzer dealt with tho question of building land prices.
He started by posing the problem of the recont increase in prices and how the situation would tend to worsens "..In 1962 one could rofer to land costing £3,000 por acre as being “very expensive". It would no longer be thought so. A price of between £3,000 and £4,000 per acre for good housing land on the outskirts of Nottingham was recently thought to beta fair deal" whereas 2 years ago it might have been betwoen £1,200 and £1,500; and land in a good suburb 20 minutes from a mainline London Terminus has quite recently jumped from under £20,000 to about £25,000 por acroseece™
"Although the actual siting of housing is influonced by the pattern of development and by town planning control, price levels are essentially fixed by demand. ‘that determines the level of demand? Population is the first factor. The Registrar General's latest projection shows !Ingland and Vales with 63m. people in the year 2002, an increase of 17m. — the equiva= lent of anothor Sevenoaks evory 15 days, or a IManchester every 18 monthSeee Dut there are two other vital questions. First..will be the offect of increase in real incomes..eeThe demands of all kinds on land will grow — industry, business, shopping, transport, education and recreation. In the case of housing alone wo shall want bigger houses — to provide more space for ourselves as well as for 211 our household equipments; we shall r.j;lace slums with larger dwellings at lower densities....ind certainly more efficient building would increase the rate of replacement of worn-out housing and therefore tend to lower still further the national figuro for housing density.
"The second question..is...the distribution of population. Will the South-Bast for example have $ or ~ of the extra population ~ will its share be an extra "Sevenoaks" once every 30 days or once every 60 days? The Government proposals for accomodating another 4m. people in the South Bast appear. to accept...a continuation for this region of the pattern of distribution which established itself between 1951 and 1961. But within the region it is the location of employment - particularly the level of employment in central London — and the pattern of transport which will determine the distribution of demand for land..."
Mr. Switzer then considers the basic reason for the big increase in the price of lands ",."Builders'™ domand may differ from “houscholders!" demand for 2 reasons: first, builders are now stock=piling land because thoy fear legislation to control its price; and second, they are interested in getting high densities because the greater number of dwellings they can put on the land they buy, the greater their total building profits, They are therefore willing to pay for density. Indeed price peracre appears to be almost directly related to permitted density -— the land price per dwelling falls only slightly as density rises...I therefore conclude that it is largely tho pressure from builders which has created higher densities and thorefore higher prices per acre, a pressure backed by local authorities since it enables them to increase the rateable value within their own bound— arics.ee." He ends by warning that a continuation of the present trends could be disastrous and would lead to chaos, and puts forward his solution, that of planning not through prico control, but through the 'open market? and 'a complete analysis of land sales.* Ho aoo8°Appoar to see that he has made out a poweful argument for the social ownership of land and building.
“:
« 6 ot