There is something profoundly wrong with our housing system: demand and prices continue to rise yet supply does not, largely due to the development process. Toby Lloyd argues that any serious attempt to address the housing crisis must include measures to change the land market, allowing those who want to build to buy land at a low cost.
Buy land. They’re not making it anymore. – Mark Twain
Housing in the UK seems to have almost economic theory-defying properties: demand has risen continuously, as have prices, yet supply has not. The key to appreciating and changing this is understanding the development process, and especially the way the land market works. Raising the quality and quantity of the homes we build and lowering the cost is a fruitful area for long term reform.
What makes housing different?
There is something profoundly wrong with our housing system. No matter how high house prices rise the market does not respond with more supply.
No other market behaves like this. If the price of wine, flip-flops or smart phones rises, producers react by making more of them. The difference between all these things and houses is that you can import flip-flops, or sell someone a new smart phone, without having to develop land, but you can’t build a house without somewhere to put it. And that means engaging in the land market.
Try buying some land. You will rapidly discover that the land market has some very odd features. First, it’s extremely hard to find out what bits of land might be for sale. Landowners sometimes advertise a site for sale, in trade magazines most of us have never heard of, but this is very much the exception. Most sites are bought by a developer or agent approaching the owner directly to suggest a possible sale.
Second, it’s often very tricky to find out who the owner is. The ownership of most land is recorded at the Land Registry and can in theory be looked up – but it’s not an easy process, and you need to know what you’re doing. Half the time it turns out that the registered owner is a company name, often registered overseas, so you may never be able to track down someone who could discuss selling the site.
The next barrier is simply that most landowners have no intention of selling their land, at least not unless you offer them a very high price. After all, they’ve stopped making it. Many landowners turn out to have no interest in building: 50% of land with planning permission in London is owned by non-developers. So what is a silly price, or a fair one? Nine times out of ten the site will not have a selling price advertised. It’s all up for negotiation, and as there aren’t many transactions, and each site is different anyway, it’s not easy to compare your bit of land with another to work out a fair value.
How to value land
The first two problems above are annoying inefficiencies, and help ensure that the land market remains an opaque and mysterious business, but they could be overcome with some simple institutional reform. The third problem is far more profound: no-one knows how much land is worth. Instead, those in the development and property industries attempt to estimate the ‘correct’ price for a piece of land using what is known as the ‘residual land value’ methodology.
At its simplest, you start with what you could sell it for with something on it – e.g. a market value house – and then subtract how much that something costs to build and a reasonable profit margin. The remainder is the ‘residual land value’ – the price you can offer the land owner. Build costs and profit margins are well established, so both sides have a reasonable estimate of this final price.
Although it is the last step in the calculation , the price of the site is the first cost to be fixed and paid – and it’s almost always the single biggest cost in development. This leaves the developer carrying a whole series of risks, such as planning delays, construction problems, interest rate changes and, more notably, significant house price variation.
Risk aversion in house building
If any of these risks occur, you could be seriously out of pocket – so naturally developers seek to reduce this risk as best they can, by trimming costs, sticking to well-known technologies and product design, selling homes before they are built to investors, and trickling new supply on to the market to avoid lowering local prices.
The result is thoroughly sub-optimal: identical blocks of flats that seem to take years to be delivered, and are largely bought by buy-to-let landlords and foreign investors, not people that actually want to live in them. This business model is now completely entrenched, as a small number of major firms adhering to it dominant the industry. The difficulty of acquiring land acts a massive barrier to entry, preventing new competitors, especially SMEs, from challenging the existing players’ model.
The Viability Trap
Developers are not acting irrationally: this model has generally delivered well for them and their shareholders. But it does make them risk averse and reluctant to build at scale, for fear of significant losses. Of course, if you buy the site cheap enough you can afford to take the odd risk, even make some mistakes, later in the process. Unfortunately buying the site cheap is rarely an option, because in a competitive land market there is nearly always a more optimistic competitor trying to outbid you in the auction for that site.
When you’re trying to work out how much to offer the landowner, if you make a sensible estimate of where house prices will be in three years you’re likely to be outbid by someone who makes a more bullish estimate. If you assume you’ll have to follow local planning policy and provide, say, 30% affordable housing, your offer will be trumped by a rival who reckons he can screw the planners down to 20%.
The result of the land auction process is that the worst scheme, the one that offers the least to the community, the poorest quality homes, and charges the most for them, is generally the one that will happen, because this is the one that offers the most cash up front to the landowner. As a result, development is always already at the margins of viability. Even a relatively small shock can see construction grind to a halt rapidly, because there is simply not enough margin left after the landowner’s cut has come out for the developer to want to build.
This is why developers are currently queuing up to renegotiate ‘Section 106 agreements’ (legal offers of affordable homes, infrastructure or funding to councils to secure planning permission) that they signed up to voluntarily a few years ago. Of course, this trick only works once. Lowering the expected cost of future Section 106 agreements simply enables developers to calculate a higher residual value on the next site, and so pay the landowner more for it. Thus reducing the burden of planning obligations can only have a very short term stimulus effect before land prices adjust to absorb the new margin. The same is true of any increase in the availability of capital, whether from easing credit conditions or public investment: if it is not accompanied by an increase in land, it will just inflate land prices.
Already incentivised to eke out supply, if the market turns down, developers turn off the taps entirely. In a falling or stagnant market the best strategy is to hold onto the sites and wait for values to come back – or ‘prioritising margin over volume’, as the largest house builder in the country puts it. And when recovery does come, land markets quickly price in expected future value gains, keeping development at the margins of viability and making output growth painfully slow. The combination of developers’ ability to withhold supply and the viability trap, both created by the land market, creates a downward ratchet in overall house building. Over recent decades total supply has plummeted with each economic crash and then inched up during times of growth, never quite reaching the previous peak before the next crash comes along.
Minimising output to maintain prices is not a strategy that many other industries can adopt. Providers of social care or hamburgers can’t stock pile their products for five years, waiting for the right market conditions. But those that own land (or equivalent natural resources, such as oil) always have that option because no new supplier will undercut you, and there is essentially no holding cost for land. Even if land prices do fall for a bit, over the long run they always seem to rise, so waiting makes sense. Inevitably, developers find themselves holding onto land banks, and often making more out of trading them than they do from construction. In fact, British developers have long been a curious mix of land traders and construction managers – and there’s often more money to be made from the former function.
The Law of Rent
As Adam Smith and David Ricardo noted, there is no easy way around this phenomenon: Ricardo’s ‘law of rent’ states that the value created by positive development accrues to the person that owns the land. The fault is not with the developer (at least as far as they are acting as a developer rather than as a landowner), nor the residual valuation method: it’s inherent in land markets. Land markets tend to internalise productive value from elsewhere in the economy, and return them to the landowner, leaving little potential return for building companies, or for residents or the wider community. Typically land markets successfully capture almost all the financial gains from public investment in, for example, new train stations or better schools.
One proposed solution is to loosen planning rules to flood the market with land with permission to bring down the cost. Endless urban sprawl may be acceptable in Texas and other land-rich places, but it has serious environmental, social and political implications that render it untenable in the UK. Blaming planning exclusively for land scarcity ignores the fact of concentrated land ownership in some areas, and the incentives landowners have to hold on to sites, hoping for a change a reversal in planning policy. Ultimately, this approach misunderstands the nature of land markets: we have a planning system because the right bits of land are inherently scarce, not the other way round.
Interestingly for our current times, the law of rent implies that we cannot solve the problem just by applying more money to it – in fact pouring more cash into the land market only pushes the price of sites up still further. The search for solutions therefore has to turn to other kinds of intervention that can disrupt this pattern and prevent land markets from extracting all the value from development before it’s even happened.
Any serious attempt to address our housing crisis must include measures to change incentives and price signals in the land market, secure land at low cost, and get it into the hands of those who really want to build. For example, by setting up Community Land Auctions, compulsory purchase of land in key areas, and using the tax system to capture future price increases caused by public investment.
Housing is different because land is different from other assets. This understanding is integral to solving our housing crisis. Martin Wolf of the Financial Times recently noted that this awareness was central to the classical economics of Smith and Ricardo, but was lost in 20th century economics. We urgently need to re-capture that understanding in the 21st to truly deal with the housing crisis.
Note: A version of this article appeared originally in a Green Alliance publication and gives the views of the author, and not the position of the British Politics and Policy blog, nor of the London School of Economics. Please read our comments policy before posting. Home page image credit: Capt’ Gorgeous.
About the Author
Toby Lloyd has worked in housing policy across the public, private and voluntary sectors for ten years, and joined Shelter as Head of Policy in 2011. Previously he led Navigant Consulting’s policy and strategy division, where he advised local and national government and the private sector on housing, planning and regeneration. He has been a senior policy manager for the Greater London Authority, a project manager for the London Rebuilding Society, and taught financial history at LSE. In his spare time he is part of the Hackney Cohousing Project, a community led scheme seeking to develop fifteen homes in a mixed tenure, multi-generational neighbourhood.
Progressive land value taxation – it works. Taxing land on its highest and best use frees up land that sits dormant. Use the market to free up the market. Make it punative to land bank by ensuring that land must be productive. Combine this with a central market place for all land will see transactions rise. We need to make it easier to buy and sell land.
A further point in relation to this is that governments have little financial incentive to invest in infrastructure as there is no direct means of capturing the consequent increase in land value. With the right sort of LVT in place, improvements in infrastructure would result in increased flows in tax revenue; thus in infrastructure could be funded by bond issues or creation of money for the purpose.
A prerequisite would be that the infrastructure was well-conceived so as to give rise to the increased value. It would still be necessary to evaluate projects to stop the white elephants being pushed through.
Under an LVT system governments would also have the incentive to protect its revenues by measures such as effective flood defence schemes.
A very good article and everyone wishing to understand the impact (or lack of) of government policies on housing should understand.
The only point I disagree with is below. Land is naturally scare but mainly because of the lack of infrastructure. This is the responsibility if the planning system, not a underlying reason. The government has failed to open up new areas by lack alway investing in existing communities instead new towns; in areas like London the planning system rights off large amount of land due presevatio. Orders or views of building or simply due local objects or because it not been previously developed or greenbelt policies. These are all restrictions helping write off large areas of land that are appropriate for development or at least should be considered.
“Blaming planning exclusively for land scarcity ignores the fact of concentrated land ownership in some areas, and the incentives landowners have to hold on to sites, hoping for a change a reversal in planning policy. Ultimately, this approach misunderstands the nature of land markets: we have a planning system because the right bits of land are inherently scarce, not the other way round.”
This is a fairly thorough analysis of the operation of the land market, although it does gloss over the idea that holding land has a cost. Even someone who inherits land has an opportunity cost in holding land undeveloped – but a developer must finance any land bank they acquire, which in turn incurs a cost. The secret is that many developers do not actually purchase land until it is needed: instead they secure an option to purchase which is usually far cheaper than financing the purchase itself. Moreover, they are free not to exercise the option until they have a profitable opportunity to develop it. If there is an expectation of volatility and/or a rising trend in property prices they can set a strike price that gives them a profit which is related to the maximum property value expected during the term of the option. A high, out of the money strike price cheapens the up front cost of the option. This mode of operation helps to generate a bubble, as it allows capital to be heavily geared via small option premia. A corollary is that when land values fall all that is at stake for a developer using options is a cheap option expiring worthless, not a loss on the capital value of an undeveloped landbank.
The key to understanding our property market is to recognise that there are no signs of a real shortage: average occupancy remains stable at historically low values, newbuilds do not fly off the shelves to be sold to those escaping accommodation in Nissen huts and tents – indeed, we have a significant stock of vacant property.
https://a.disquscdn.com/uploads/mediaembed/images/1795/3483/original.jpg
That helps explain why there is no identifiable link between house prices and building either in the large and the long term:
https://a.disquscdn.com/uploads/mediaembed/images/1825/1263/original.jpg
Or in the short term and locally:
http://www.capx.co/lse-pilot-study-confirms-that-increasing-new-housebuilding-does-not-drive-down-house-prices/
It should be obvious, but prices are determined by how much banks are prepared to lend against an average property. Cut the size of mortgage offered, and prices fall. Increase the size of mortgage granted, and they rise. The total flow of mortgage funding then determines how many transactions take place:
https://a.disquscdn.com/uploads/mediaembed/images/1810/8174/original.jpg
There is no need to think in terms of LVT (which has never been successfully implemented anywhere: even in Singapore and Hong Kong there are still property bubbles). There just needs to be control over the size of mortgages granted: what you cannot borrow you cannot pay. That is, developer expectations for rising prices can be countered quite simply.
I agree with many of the comments you make, but it should be remembered that local councils often restrict housebuilding, much to the annoyance of landowners.
It is interesting to note the comments made on a blog post by Fulham estate agents Lawsons and Daughters about the proposal by the Royal Institute of British Architects to introduce a minimum size for new-build homes – http://lawsonsanddaughters.com/shoebox-homes-fit-first-time-buyers/
The estate agent points out that demographics are changing. The number of single person households has soared over the past decade. Census figures show there were more than 7 million one-person households in 2011, or 12.8% of the population, in comparison with just over 6.5 million in in 2001.
This is an increase of 564,000 and London had the highest proportion of single person households. This means, the answer to our chronic shortage of housing could be to build smaller properties in densely populated areas for single-person households.
I enjoyed the excellent analysis by Toby Lloyd, but was disappointed at the end with his very limited discussion on options for addressing the dysfunctional land market. For this reason, I was very pleased to read the comment by Scott Baker advocating Land Value Tax (LVT). My own work is in rapidly urbanising countries where the problem is even worse than in the UK, as land prices a re very similar, though incomes are far lower. As a result, one in six of the world’s population are forced to live in overcrowded slums or illegal settlements. I have been advocating LVT to the governments of several countries as part of World Bank projects, though so far without success. I can only conclude that the political forces representing landowners and developers are so strong that governments are too wary of taking on such powerful interest groups. – or maybe even represent them. I recommend the book on LVT by Martim Smolka ‘Implementing Value Capture in Latin America’ available at http://www.lincolninst.edu but I would be very interested to know of other examples where LVT has been implemented and what outcomes it achieved.
Housing
Get out of London and take a look at the real scene.
1) The need for housing is not a given! It is propagated by vested interests. (Housing lobby). Look at the funds given to political parties over the years)
Waiting lists are a favourite, meaningless tool used. Wouldn’t you put your name on a housing list? It’s free, you may be offered subsidized housing, you have pretty much life tenancy and you may be able to buy the property after a few years very cheaply.
2) There is a need for housing in some parts of the county but not in others. Unfortunately the government is forcing every borough in the country to have a housing quota even though there is little call for new housing. Many of the new houses near me have been on the market for between 5 and 7 years.
3) The trouble is the houses are not where the jobs are. MOVE THE JOBS!
4) There would be far less acrimony if brown sites are used first.
Did you know there is Vat on Brown field sites and non on Green fields. I Wonder why!?
5) Then there are the empty houses? On my street there are seven!
6) 240.000 people emigrated here last year. Unless you control that, you will never keep up by building more houses. Let’s just slab the Southeast and be done with it. Clearly the same applies to jobs PS I live in Nottingham. House prices start at £80,000. Less at auction.
Proponents of affordable housing in the U.S. have had a long history of battles against land speculators, including government and quasi-government redevelopment entities that acquire land parcels and hold them for years or decades in an effort to pull together a large tract of contiguous parcels. In most cases, what is needed is in-fill development to stabilize existing communities. The response by community activists has been to form community land trusts, charged with taken land out of the market permanently. The land is leased to individual households at a ground rent based on household income, the land lessee then purchases the house for a price that reflects replacement cost less existing depreciation. In my professional work in this arena I designed a structure that would enable CLTs to expand on a scattered-site basis to avoid the problem of concentrated “low-income housing” in small areas (often where employment opportunities are not available). Public collection of the full rent of land is certainly a far better public policy response to rising land prices and the scarcity of affordable land (for all development options). The CLT is a rational response to a very dysfunctional system of land tenure and taxation.
Typically thoughtful piece by Toby Lloyd . He knows George Land Tax inside out and he alludes to taxation which captures land value uplift.
Supply and demand don’t operate effetcively in a land/housing market. In Sydney in the last three years housing delivery has almost doubled – and prices went up 13% in 2013 alone.
One of the independent variables in the equation is the availability of cash. Essentially Asian liquidity is flooding into global city housing markets . The ‘demand’ comes from abroad. The response is howebver local – and constrained by another variable :Nimby pressures preventing housing delivery (because Sydney need not 25,000 homes a year but 40,000 but cannot achieve this)
What Henry Law is referring to is the fact that landowners already extract the maximum value from their land. That is simply a fact of economics, just like gravity is a fact of physics. By implementing LVT as a replacement tax (getting rid of taxes on labour and productvity) the economic system is reconfigured so that those who are productive receive full reward for their efforts while those who sit on their arses receive nothing.
“Thus under a Land Tax system all land owners would seek to optimise the rental value of their property.”
Which is precisely what they do at the moment except that optimasation may involve holding land out of use altogether so that the land just grows weeds or become completely derelict, in which case nobody at all gets to use the land.
“Anyone who wanted to use their land or property for the common good, would therefore be pushed to where the rental values were least.”
What landowners are so philanthropic that they make their land available for the common good today?
What sort of thing do you actually have in mind?
I am happy to accept the weakness of my understanding of Land Tax, but surely its aim is to make so land passes to whoever can use it most profitably. So while their is no yield from an empty building and their would be a cost, the same cost would apply if the building were used for social housing or for luxury flats. Thus under a Land Tax system all land owners would seek to optimise the rental value of their property. Anyone who wanted to use their land or property for the common good, would therefore be pushed to where the rental values were least. This would be as socially and environmentally damaging as the worst that we now endure.
No, because “Marginal Land” or nearly Marginal Land, is, by definition, less desirable. People are not going to build a high rise in the middle of New york State instead of New York City, no matter what the low cost of Land is out there. In fact, you’d virtually have to cover the entire cost of the project and even then, developers wouldn’t build in the middle of New York State.
Urban land is by far the most valuable. It would be an ecological good if even more people were using the efficiencies provided by urban living, instead of fostering urban and suburban sprawl. The Land Value Tax encourages that by forcing valuable urban land to be more efficiently used.
At the same time, as the Land Rent goes up, the Land Price will come down, though it’ll go back up again when the salutary effects of the tax work their way into the economy. But, as urban land value increases, more people will want to live in the city, and so on and on…in a virtuous cycle.
Even Parkland would be encouraged (and there are studies that back this up), since people will pay more to live near a park, thereby increasing the land rent again.
The heirs and assigns of the Plantagenets still own 90 percent of the land they expropriated 850 years ago – and to which they added by way of the Enclosures and Highland Clearances. Land Value Taxation is the answer – but which political party has the guts to implement such a scheme?
It’s truly staggering that the author encountered David Ricardo, and Adam Smith, but not Henry George (or, for that matter, Adam Smith’s mostly similar proposals, predating George’s).
The answer is neither complicated, nor unproven. In fact, it is probably the most proven theorem in the world.
It is the Land Value Tax.
Simply put, you tax the full rental value of the Land, and the buildings upon it, (if any), not at all. In some cases, cities use a split rate tax, like 6:1 Land:building (Harrisburg, PA), which works reasonably well.
The Land Value Tax forces idle land into production, or into selling, because the tax must be paid. At the same time, the lack of a building tax encourages building. It’s the best of both worlds.
Economists such as Michael Hudson, Mason Gaffney, Nic Tideman estimate economic rent to be 1/3 or more of GDP in America. Much of this is in privatized rent on the locational value of Land (i.e. the demand for it). If we collected this, we could eliminate most or all of other taxes on production, thereby eliminating that deadweight burden as well.
I recently gave a presentation for the Henry George School in which I analyzed New York City’s Property Development and the implications for a Land Value Tax:
http://www.opednews.com/articles/Fairness-Sustainability–by-Scott-Baker-Community_Fairness_GROWTH-DEVELOPMENT_Georgism-140210-926.html
What is it with economists that they think that all that is needed is to have the right leavers in place and all will work as it should. The Land Tax is a great idea, up to the point where it closes down any enterprise that aims to put its services to culture, the community or the environment ahead of making money and drives start-ups into tax-dodge properties (in what-ever form they take). There is no getting away from the need for responsible, accountable authorities, with the power to provide leadership to deliver what is needed. If that means the power to ask the courts to confiscate under-used land, its not the end of the world. Economists would be far better employed looking at the impact of credit expansion on asset price inflation and the distortions this causes in markets, politics and social values.
“The Land Tax is a great idea, up to the point where it closes down any enterprise that aims to put its services to culture, the community or the environment ahead of making money and drives start-ups into tax-dodge properties (in what-ever form they take).”
Could you clarify, please. How might this happen? And how would land value taxation make matters worse than they are at the moment?
The Land Value Tax – unlike almost all others – cannot be avoided. You cannot move Manhattan land to the middle of New York State. Assuming we have honest Assessors, and their are proven ways to do that, and good comparable sales figures, which we do in the most valuable urban land, we will be able to collect the tax. Then, landowners have a choice to pay the tax. They can either build something people want to live or work in in order to collect rent for the tax (great!), or sell the land to someone else who can (almost as great!).
The only confiscation necessary is if land-owners can’t, or won’t, pay the tax. Then, the city can create a land bank and sell to the highest bidder, while still keeping the Land Value Tax for the new owner.
Credit expansion is mostly based on Land Speculation. In fact, there is a heavily studied Land Cycle (Homer Hoyt, Mason Gaffney), that cycles every 18.6 years (roughly) and goes back centuries to the beginning of capitalism in Europe:
http://www.opednews.com/articles/The-Land-Cycle-and-the-Sto-by-Scott-Baker-130728-228.html
It is stronger than ever, and we are still climbing out of the last over-credit cycle and predictable bust (yes, several Georgist economists predicted the cycle (Fred Harrison, Phil Anderson (who makes a living making these predictions).
The Corruption of Economic (Gaffney) describes how economics has been corrupted by those, like J.B. Clark, who conflated Land with Capital (they are almost the opposite) and made economics into the “Dismal Science” (a phrase invented by Henry George).
It doesn’t have to be this way. Study the role of land in production and the credit cycle. By far the greatest source of income for banks are mortgages, which are largely speculations on land prices. Tax it away, untax buildings, and you’re most of the way to the Promised Land.
There are obviously examples where the planning process has stalled developments but overall there is a huge overhang of planning consents which have not resulted in development. There are sites in the centre of Brighton which have been vacant for the best part of 30 years, with consent for most of that period.
The interesting question is why the author has not mentioned land value taxation, a policy of which he is well aware and without which the problem is insoluble. Was he explicitly instructed not to? Is he subject to an implicit understanding that it was not to be spoken of if he wants to keep his job, or Shelter its funding. Very strange.
Which part of supply and demand do you not understand? Imagine huge portions of land suddenly became available at a low cost for “deserving” people. How long until it would all be bought up and we’d be back to complaining about the scarcity?
Comparing with markets that still have room to grow doesn’t make sense. Eventually production of (for instance) wine will have to cap out – there’s only so much land to grow grapes, there’s only so many ways to synthesize alcohol. Will you be complaining the wine market doesn’t “behave”?
Your proposed solutions are all band-aids for the symptoms. None of them will fix the underlying problem: too many people.
Dan – too many people? 80% of the population is south of a line drawn across the country just north of Leeds and east of a line dranw just to the west of Liverpool. That is one-third of Great Britain’s land area. There are more people inside the M25 than in Norway, Sweden, Denmark and Sweden. Why is Britain’s population nearly all squeezed into the bottom right hand corner?
From following the story of one proposed large development that is still in the planning process eight years since it was first proposed I would say that this article fails to get to the root of the problem. In this case the land owners have been keen to get the development to happen and have wanted to see a high quality settlement constructed. The housing demand in the area has remained strong despite the recession. The houses are likely to be built in the end and will broadly follow a plan that was created in the first year or so of the process. The eventual quality of what gets built is likely to be lower than anyone involved wanted, with more compromises on the future liveability of the settlement than were ever envisaged. The reason for this lies in the planning process and the process for deciding who should pay for associated infrastructure. The local authority does not have the experience and capacity to work with developers in a constructive way and is politically vulnerable. The public distrust of new developments is very high. The ability of the local authority to raise funds for associated infrastructure is weak. Developers have to invest substantially in the planning process with poor certainty of outcomes. The developers, planners and consultants are the same people who have met on a whole range of other projects, often in different roles. The amount of money to be made eventually is substantial and the networks of collusion are real as are the strategies played to undermine collusion. Only when all the factors align can the process move forward. This requires behind doors horse trading where consultants ‘bonuses’ are agreed and planning officers get new job offers, while land owners learn that they must carry a higher contribution to infrastructure costs in order for the politicians to be seen to have delivered. Despite consultations and regulations to pave the way to nirvana, the result is likely to be another fudged missed opportunity for a development that might have restored some public faith that development doesn’t have to be bad. When this is the world of real development, how much more attractive to use the failure of the system to park money in purely speculative development land values and not even embark on the process of doing anything for real. You can even get planning consent if that helps, although the things you would agree to to get it mean that you had no serious intention of doing anything than developing an asset to borrow against. The lesson of all this is that there is one place worth throwing money – at the planning process. Put in place high powered planning teams who are brought in when major developments are needed. Give them the budgets to oversee the process in a spirit of transparent partnership and with access to government departments to reach the funding needed for infrastructure to unlock development sites that can’t work with existing road infrastructure in particular. The fact that this doesn’t happen either reflects a lack of political courage or a political skulduggery that benefits from the vast profits that are still being made from infill developments where infrastructure costs are low and community objection is very localised.