House Prices - Again

[Addie]

There's a story here

The Island's Housing Market may be controlled by a handful of developers.

 

Rushen MHK Phil Gawne made the claim in the House of Keys this morning as he introduced a bill to amend the Land Registration Act 1982.

 

During an outspoken speech, Mr Gawne claimed that there is strong evidence that the housing market is being manipulated by a handful of developers to maximise their profits at the expense of the house buying public.

 

House prices have increased by a huge amount since 1990 and the value of development land has gone up from £34,000 per acre in 1990 to £265,000 currently.

 

Mr Gawne also claimed that the Island's main developer is abusing it's monopolistic position by offering less than satisfactory conditions to house purchasers.

 

He is seeking to introduce a bill to control the taking out of options to buy land for development.

 

He wants such options to be registered in the public domain and to give the Department of Local Government the first option to buy newly zoned development land.

 

So, "The Island's Housing Market may be controlled by a handful of developers.

"? This is 'news'?

 

But what a shocker that "development land has gone up from £34,000 per acre in 1990 to £265,000 currently"! An extraordinary rise. IOM Gov't Planning must have created more millionaires than the UK lottery over the last fifteen years.

 

Well done Phil Gawne though for bringing the subject into the light.

[Amadeus]

Mr Gawne also claimed that the Island's main developer is abusing it's monopolistic position and is offering less than satisfactory houses to purchasers.

<{POST_SNAPBACK}>

Fixed your quote...

[Billy One Mate]

I would love to know why Government bought the land at RED GAP Castletown for the new housing down there at £450,000 per acre.

[Ripsaw]

I would love to know why Government bought the land at RED GAP Castletown for the new housing down there at £450,000 per acre.

 

Happy to oblige...

 

The hon. member for Michael

(Mr Cannan) to ask the Minister for Local Government

and the Environment:

 

(1) Can you confirm your department

purchased 4.5 acres of land at Red Gap,

Castletown, for £1,814,200 (or £403,000

per acre); and, if so,

(2) does your department consider £403,000

per acre the current valuation of land

zoned for development?

 

Answer

 

(1) I can confirm that, on 12th November

2001, the department purchased the 4.535

acre site at Red Gap, Castletown, from

Royal and Sun Alliance International

Financial Services Limited for the sum of

£1,814,000, that is £400,000 per acre.

(2) There are various factors which dictate

the purchase price of land zoned for

development.

The reasons for the department agreeing

to proceed with this particular purchase

were as follows:

(a) At the time, this was the only

land in Castletown which could

be developed relatively quickly;

(b) the acquisition and development

of this land would not only

provide much-needed first-time

buyers’ housing in Castletown

but would also allow local

authority housing to be

constructed so as to allow

tenants to be decanted from the

Janet’s Corner housing estate

prior to the commencement of

the major refurbishment scheme

proposed for this estate;

( c) the site will provide a total of 61

dwellings, which gives a price

per plot of £29,500, which is

both viable and justifiable; and

(d) lastly, I must stress that the

department was in competition

with several other private sector

developers who were anxious to

acquire this land. Indeed, it is

rumoured that one of these

developers did actually make an

offer in excess of the offer

which the owners accepted from

the department.

My department considered the price to be

reasonable in view of the comments I have just made. I

do not believe, however, that the price paid sets a

precedent for other parcels of land, as each has to be

considered on its own merits, and I can confirm that

we have purchased land in other areas at prices

considerably less than that figure.

 

Source: Tynwald.org

 

I notice in part (d) that he uses hearsay and rumour to give himself a pat on the back for doing so well.

[Billy One Mate]

Well done Ripsaw that was excellent. I am impressed. So Government in one hand state that land price is based on its own merits and on the other that Developers are manipulating the price. Me confused.

All Government have to do is to rezone further public land for development ie Supply and Demand. The price per acre would then come down.

[Slim]

But our house prices have risen in line with UK house prices over the last five years. Are the same devlopers manipulating those prices too?

[Ripsaw]

All Government have to do is to rezone further public land for development ie Supply and Demand. The price per acre would then come down.

The price per acre seems horrendous, but the price per plot seems about right (which is actually much lower than many on the open market).

 

The bit where he justifies the price by claiming that A.N.Other bid higher than that price could be a smoke screen, it is afterall by his own admission only a rumour.

 

The all Island Statigic plan (drafted in 2001) was supposed to address land suitable for development, not sure if it has (suspect not).

 

Things start getting funny when DoLGE buy land, put in for planning, then planning turn them down. As much as land availability is partly to blame for value cost rises, don't forget that there are many hundreds of buildings waiting to be rubber stamped on existing zoned land.

 

DoLGE were supposed to be streamlining the planning procedure to cut down on delays... The ammendments must have been held up

[Billy One Mate]

What he also dosent say is that they were unserviced plots and the land had a lot of running sand on it putting up the construction cost which in the end was approx £110,000 per unit. Add on the plot price and you have £140,000 per dwelling.

 

It is very easy to blame Developers but a lot harder to blame Government policy when you are part of it.