Why are houses built by developers?

[Tasmania]

Just wanted to know really. Why are houses built by developers? Why does the government allow developers to buy lots and lots of land, build houses upon them, and charge people 2-3 times of what it cost to build them? And when markets are tough, these very same builders stop building houses, just to build again when prices go up.

Why can't we have it more like in other countries, where you buy the land, and then build your own home in the design you like?!?

Well you can do that if you want to, plenty of people buy land then build their own homes (or pay somebody else to).

Not sure I understand your question to be honest!

You can buy land, design a house and build it. Haven't you seen 'Grand Designs'?

Investigate the costs. You could do it.

Are you suggesting that everyone who wants a new house should design/project manage/build it themselves (well, not with their own fair hands)?!? Seems like a very odd question indeed.

Land is like gold dust round here (south east) if you were lucky enough to find a bit of affordable land you'd have to fight for planning permission.
Developers are the only ones who are able to manage it. They buy up huge chunks of greenfield land and force through planning with every underhand tactic known by flexing their financial muscles.
It doesn't work the same for the average Joe!

What Turnip said. Developers get away with murder, and the recent changes to the planning laws (certainly in Scotland, don't know what it's like elsewhere in the UK) means that they will be able to get away with even more.

I wish they would overhaul the system and do as they do in other countries so that buying land and building your own home would become easier (and cheaper)

because they sit on the plots.
because if they do sell 'self builds' it's often to their architect's standard boring plans and materials.
we were looking for a plot before but in our area they are either ridiculously small (think garage size) or with ridiculous restrictions (only one story allowed) or both. and expensive on top.
or they were large 10 acre plots, perfect for developing huge blocks of flats.

I wish that housing should be more generous.
i.e a box room should not be able to be sold as a bedroom, even if a single bed fits in, just.

• minimum size of rooms
• minimum size of storage
• wheelchair/pushchair accessible hall/doorways (bloody townhouses with 80cm wide staircases anyone?)

Rockybalboa - you obviously haven't looked at other countries. Why always think that what happens in the UK is normal and SHOULD be accepted?

I am just saying that in Germany, there aren't that many developers. Where my parents live, in their street, each house looks DIFFERENT. You buy a plot of land, and then buy a "finished, but customized house" that gets built within a few weeks (if not even days - just look at the HUF Haus).

Why can't it be like that?!?

Oh - and it's much cheaper than a house from a UK developer as well.

They charge a fortune, considering they don't pay much for the land itself (always cheaper when you buy lots!).

I'm sure that part of the problem is that we're now the most densely populated country in Europe, so land goes for a huge premium

that argument doesn't quite hold imo.
the netherlands for example are very densely populated. probably comparable to the uk.
in the uk there is this weird obsession with houses, though, when building flats would make much more sense for a large area of the population.

That is true - we tend to build big houses on tiny plots.

Where I live (south east) there are far too many flats (converted houses where they see how many flats into a regular size terrace) and nowhere near enough houses so a 3 bed flat will be £150k but a 2 bed house will be £300k!!

Self build is really not affordable in the uk. I agree op, it's a shame and a stupid way of doing things.

People in the UK put up with really really shit housing.

"They don't pay much for the land" and your evidence is .....

A lot of it is to do with the planning process taking so long and being so expensive.

I'm in France and there are plenty of developers. Often they just buy the land, get planning permission, connect the utilities and then sell the plots (for a very nice profit) for the owner to build their houses.

It may also have to do with the difficulty of financing a self-build, I don't know this for a fact but I have heard that it's harder to get a mortgage on a place that hasn't been built yet in the UK than elsewhere.

Do you really think a) buying the land b) getting the planning permission and c) connecting the utilities doesn't cost money? I have little sympathy for builders but lets have a little bit of realism about the economics of this all.

Developers build houses simply because its another means of making money. No one works for nothing (apart from volunteers) and it's just another type of business.

Actually, it's the landowners making a fortune out of housing development. Developers have a standard(ish) profit margin built into a development appraisal of around 12 - 20%, depending on the area. Now clearly 20% of a fuckload of cash is a fuckload of cash. That's why it's lucrative to do large sites and not individual ones so much - economies of scale.

But landowners have a value in their heads which is set at 2008 prices. Unrealistic in other words. Most of them don't have to sell. But the government wants more housing and some (not all) areas want the investment. So landowners get away with still selling for stupid money while the difference to make schemes viable comes out of planning gain i.e. infrastructure and quality of build and development.

Don't blame planners either.

Gaining planning permission generally costs 1% or less of development value, so actually it makes bugger all difference to the viability of housing schemes. In a big scheme developers only tend to build 30 houses per year (so as not to flood the market) so also even taking a year to get a permission, which is rare, is little time in the overall timescale for development. And most long delays in gaining planning permission are getting banks to sign planning agreements.

• the houses are all the same (or so it seems). standard plans submitted and approved easily even though they are crap

Agree re landowners and this is one major difference between uk and other eu countries. A small number of landowners sitting on massive banks of land and its just not worth their while selling odd little bits here and their. They sell big chunks of at a time which only business developers can afford to buy. In an ideal world you'd see more cooperative type arrangements to buy up these land banks but I don't see that ever happening in Britain, people generally to individualistic.

Actually also developers to buy up chunks and land bank too, I agree this is wrong but is a very small sliver of land compared to the larger chunks which become the massive housing estates.

Developers have standard house types, which are crap, as a rule. They're designed by quantity surveyors though, not architects, with unsurprising results. They can be persuaded to deviate from them if thumbscrews are applied, but rarely.

Developers tend to have options on land as well, rather than owning it outright.

I wish it was more common in this country to build your own house, then I might stand a chance of doing it. Maybe I should move to Germany... Sadly property prices being what they are, and building plots being very rare, there's very little chance (unless I suddenly come into enough money to buy a house and knock it down in order to build the one I really want).