There is a revealing comment in this morning’s Financial Times about the Chancellor of the Exchequer ‘Pledges to reduce City red tape to the rest of the UK economy’ speech to the Mansion House audience which starkly highlights the passionate selfishness of those who oppose new homes for our children. ‘’Interested’ said that They raise taxes on businesses across the board including developers. Release loads of new housing to drive down house prices for those who own their own homes’.
I do not doubt the author’s sincerity but two points need to be made. One, as a developer you had to be goofy not to make big money in the last three decades. The system is a lottery rigged in your favour. One of the two ingredients needed, building land, is rationed. So your share enjoys a scarcity value premium. And the economy’s regular outbreaks of inflation delivery frequent shots of price growth testerone.
Second, the claim that loads of new houses are driving down house prices is incorrect.,Fewer houses are currently being built under Labour, and house prices are not falling. The possibility they might fall in the decades ahead if enough are built in some areas does exist. In a fair society in my opinion this is the way we need to proceed. The author thinks home owners have an entitlement to excess unearned profits in the past and in the future. . Because I do not think this is fair to others in society, so I do not agree.
These opinions illustrate the embedded mind-set of an important part of the vested interests who oppose new building. They reap the rewards in a currency called hope value. The mechanism to channel its proceeds back into local communities who created the currency is land value capture. The snag for far sighted local leaders intent on taking back control of LVC is it takes 10+ years. But it is the only financial sound way to proceed, as it makes large parts of the investment needed self-funding. Sad that Rachel Reeves does not yet understand the opportunity.
Ian Campbell
16 July 2025
