So we were under way – our adventure had begun! We were stepping into the dark and I found myself enjoying the process. There was excitement in the chase, especially using a piece of legislation that neither we nor those we talked to really knew how it worked. We were making it up as we went along, and success or failure was not an issue (at least at this point), leaving us free to experiment.
Believing in the Right to Build somehow gave our aspiration life, and windows started opening. At this point we weren’t even sure if we could afford to do it, after all, can you build where you can’t afford to buy?
Peter (my architect husband) said there was a development rule of thumb: 1/3 for the land, 1/3 for the builder to build the house and 1/3 for the developer.We didn’t really know what was in the Developer’s 1/3, but knew that part of it must be wages, profit and fees, and we reckoned we could save on some of these.
But by how much remained elusive, for example, could the 33% be reduced to 13% and secure for us a house at 80% of market price? Probably not, and even 80% was beyond our budget!
We knew that most of what is referred to as ‘house prices’ is not about the house but about the land. So it can be argued that house price inflation in cities is actually the rise of land values over time.
Peter said that houses are like cars: they drop in value with age as they get closer to needing an MOT or the roof repaired. This is a simple and obvious truth once seen, but families miss this point, even while they feel the wrong of working hard and not being able to afford a house. Peter came across these ideas through an evening class called ‘Economics With Justice’.
The course puts forward the argument that society would be more equitable if inflated land values were retained for community uses. He wondered, could there also be a fix for the affordability problem in this? What if we didn’t actually have to buy the land?
Hearing about the Council’s duties under Right to Build had got us thinking about Council-owned land. Surely the Council must also be interested in answers to the affordability problem?
Here was the revolutionary idea– having found a Council plot, could we persuade the Council NOT to sell it to us?