The Horrors Of House Prices On Arran

The Guardian treats us to a horror story of how expensive house prices are on the island of Arran. You know, the bit just off the West of Scotland?

‘Nothing’s affordable’: buying a home now just a dream on Arran

There’s a basic logical error here. A bad and horrible basic logical error:

The Earles’ experience is shared by hundreds of other islanders. Arran’s success masks a hidden crisis of homelessness and insecurity, not for the unemployed but the island’s workforce: its mechanics, hotel staff, shop workers and even teachers are unable to find or afford their own homes. The crisis is driven by landlords cashing in on Arran’s lucrative market for summer holiday lettings, a chronic shortage of affordable homes and dramatic inflation in house prices, driven by hundreds of wealthy professionals for whom Arran is the perfect place to retire.

No, it isn’t.

Analysis by the Arran Economic Group, a lobbying organisation set up by islanders, has found the ratio between house prices and earnings is amongst the worst in the UK, with house prices eight to 10 times higher than Arran’s average wages.

House prices in Arran are the around the same they are anywhere else. Around and about the cost of building a house. We can take off a bit for depreciation of an older structure, add on a bit perhaps for one actually being extant rather than having to wait a year for one to be built. But houses cost what houses always do, around and about their replacement cost.

What costs money is a piece of land with permission to build a house upon it. That’s what is in short supply and thus what costs the cash.

If we actually look at the housing plans for the area we find that the local council is planning the supply of building plots. Of the 4,268 that they’re thinking of 60 are allocated to Arran.

And that’s where the problem is.

To note some other numbers. The resident population is 4,629. The land area is over 40,000 hectares. There’s 10 hectares per head of population that is, really rather enough to be able to build housing upon. Actually, given the normal insistence upon, what is it, 13 dwellings per hectare, we can house the entire population on 0.8% of the land and that’s every individual having their own damn house.

The price of housing on Arran is high because the local fools are planning the supply of housing upon Arran. Get rid of the planning permission system – we’ll never get rid of fools –  and houses there will cost what houses do: the cost of building them.

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Leo Savantt

The difficulties, placed by local authorities, on self-builders across the UK is, apart from the elephant of mass migration, one of the biggest drivers in raising prices. Previous neighbours in Dorset sort to build next to their elderly parents on adjacent land which they already owned. The Council granted permission, but attached an 80k surcharge (on a modest 120K self-build) ear marked but not guaranteed to go towards social housing for the disadvantaged. The result would have been that the neighbours would have been unable to afford the build, thereby not increasing supply and raising prices, hurting the disadvantaged disproportionally.… Read more »