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?!?

No, I obviously haven't looked at other countries. No need to. Doesn't mean I can't form the opinion that your question is odd. The posters before me said pretty much the same. Don't buy a house from a developer if it bothers you that much.

It is a viability thing. Banks tend not to lend against nothing. A piece of land without planning doesn't even give you security for an option. Developers can target land that has been named as an area for development in a local planning framework. To secure an option while they are applying for planning can be done with the headroom in their business plan. Obviously they don't get planning on every site. Therefore they have 10 - 15% "profit" on a site to make up the losses on sites they don't get planning on.

I get where you are coming from OP. Over here in Costa Rica, building your own home is the norm. My sister in law built her 3 bed house with all mod cons for £25,000 (including land) It took about 3 months. That was ten years ago and building material prices have gone up, so the equivalent would cost more maybe 10K more now. I bought a "second hand" house and everyone was

I do like that every house on the street looks different, and its nice for people to be able to design their homes they way they want them. I agree that UK prices are shocking and don't reflect the value of what it costs to build a house at all.

"Social housing" or houses made out of pre fab materials start from as little as 5k.

I am currently building my own house. My main frustration has been the council, surprisingly, eh?
We had to pay nearly 5k in bribery Unilateral Obligation fees before they even confirmed planning permission. Purely based on the number of bedrooms in the house. Apparently we are paying for the 'local' park which is 5 miles away, roads even though I don't drive, our strain on schools (even though I only have DD and am a single mum). They ignored the fact all but one house in the road is 3 story, and made us drop the roof to much lower than our neighbours, which will look very odd. They were insisting it had to be to Code 4 (sustainable homes) which meant extra wide doorways, deeper foundations and thicker insulation, a bathroom downstairs, steel bike storage implanted into the garden and extra UPV windows....the list goes on. It would have set us back a further 40k to do this. Then we hear they do this all of the time and simply want another £300 to 're-assess' the Code to level 3. They have delayed the build by 2 months by failing to send us written confirmation of this....arrrrgggh!
Yet developers further down the road have built huge tower block flats for over 500 families and, after starting 6 years ago, have finally plonked in one swing (solo) and a tiny slide which is meant to keep all of the kids happy as is in their remit. They only had to pay £30k in Unilateral Obligation fees for all of these homes. Let's hope they decide to build a school next as our local is over run already!

There are 400,000 house plots in England with planning permission - ready to start building tomorrow
but the developers will not do that because they need to choke supply to keep prices up.
And there are no land taxes on plots with permission to build : so it costs them nothing to sit on the land.

In other countries there are land taxes, based on what the land has permission for - so land banking cannot happen.

Its not a problem with the planning rules, its a problem with the property tax rules : but the developers pay bungs to political parties and self builders do not.

Also, picking up on Lioninthsuns point : the UK has the most ridiculously complicated building regulations in the world.
The fact that I am supposed to fit fire doors to the whole of my house, but can then leave them open the whole time, is a bad joke.

Rockybalboa I find it completely strange that you find it "odd" if someone challenges consensus. The "It's always been like this, so why change or ask these odd questions?" view is a VERY dangerous one, if history hasn't taught you that yet. A forum is a good place to challenge what is seen as the norm. You might have zero interest or awareness in what other countries do. That is a highly ignorant attitude to have, as it is always good to learn from other countries' mistakes/victories - i.e. you can copy the good things, and avoid the bad things.

I fully agree with Talkinpeace. Considering that the government wants to get more money, I seriously wonder why they have not introduced LAND TAX yet to stop developers sitting on all these plots that have planning permission, etc. It's not a new invention either. Other countries already have that?!?

I think the govt's blatant favouritism for larger businesses backhanders is getting on most people's wick. It trickles down to the councils, especially when they have budgets slashed each year. Letting companies off tax is just the tip of the iceburg IMO. It's so sad to see all of the empty houses boarded up, overgrown and neglected. Worse when you consider someone is sitting on it to make maximum profit while families are homeless.
Another bugbear of mine is our council agreeing to tear down what must be a 16th Century house which is really pretty and in full view of the main road to replace it with ugly student housing. Yes, that lot who pay no council tax but create all of the vomit flowing down the street on a nightly basis. On the other hand the tiny 20's cinema barely fit for purpose and ugly as hell is allowed to remain. We have 2 universities and 3 collages and are still coping with a 2 screen cinema Lucky students get a free bus pass to the next big town to use theirs, good for them but bad for our town. None of it makes any sense!