Council tax. review.

[Damocles]

As far as I understand it, someone in band A in an area where house prices are low could end up paying the same as someone in a high band in an area where prices are high. Because the council still has to raise the same money from roughly the same number of houses......

The real trouble is that a LOT of money gets spend by local authorities, but council tax is really only sensible to raise a small amount of money. Only, there is no other local tax and central government is desperate to make local councillors save money. So it loads far to much tax onto houses in the hope that local councils will get the blame when it goes up.

Only we all know perfectly well who to blame for excessively large council tax and they work in London, not the local town hall.

 

[pipme]

Posted: Sun Mar 28, 2004 3:36 pm Post Subject: House value
Can we find a reasonable approximation of the underlying value of our dwelling?
In DIY style, the experts just do not really seem to agree.
I have a plan. But I am far from an expert.
Perhaps we can break down the costs involved in buying land and rebuilding our houses, by using some readily available information off the web?

Rebuild costs: - http://www.abi.org.uk/public/consumer/householdpersonal/print_BuildingCalculator.asp
Better, the source, with more info http://www.bcis.co.uk/
There could be a site clearance component to that 'rebuild' cost, given that the info originates from an insurance based source.

Land values: - http://www.voa.gov.uk/publications/property_market_report/autumn_2003/pmr_autumn_2003_rb.htm
Explore this page to it's end for interesting historical data.
The land values will be related to geographical area in Hectares (10,000 sq meters )

We will need the approximate area of the house and also of the plot, in square meters.
An example from the West Country: -
Small plot (<1 Hectare) Land approximate cost at Oct 2003 £2,500,000 per hectare approximately £250 per sq meter. ( for the sake of interest 1 Hectare is about 2.47 acres )
House 4 bed large semi-detached plus single detached (non-precast) garage.
Plot size 312 square meters hence land value approx £78,000
Cost to rebuild approximate £130,000.. (A house of average quality.)

Currently selling at = £265,000
Land plus rebuild = £208,000
Difference = £ 57,000

I am saying that, broadly speaking, the underlying value of the house in question is £57K below the 'market&' valuation; it is therefore overvalued by around 27%

The premium as was pointed out a year ago comes from the 'market' probably location component of the apparent value ... Therefore I submit that without actually surveying that house the valuation can only reasonably use the method I have proposed... ie. teases out the whimsy component.

PS. Just read elsewhere, during the Welsh pilot they used 'actual' sale values, it would appear the 'location' component is also utilised when arriving at the valuation for ComTax.... Not so good if true.

 

[Damocles]

Our neighbour is building a house. Might have cost 100,000. Land cost about 115,000 I think. Land now probably worth 150,00-200,000. Finished item anticipated 500,000.

Council tax is a tax on your property. Your property includes the land it sits on. Why would the tax not be assessed on the full market value?

 

[pipme]

Note I did not mention build costs .. but rebuild.

I bet they will not obtain full insurance based upon £100k rebuild.

There are several caveats with regard to the rebuild figures all mentioned here http://www.bcis.co.uk/.
The land registry data is pretty real.

People's fancy, or the desirability for an area can vary over a short period --changes in local amenities, new roads, school availability / performance,airport expansion etc. therefore I feel the 'nice to have' component is too much of a variable.
P

 

[Damocles]

In your example pip I guess the 57,000 represents the developers premium. What he pockets for doing the building on the site.

The land value already contains the planning permission premium. In our neighbours case, the site without permission would be worth perhaps 15,000. So the value of that little bit of paper is 135-185,000. This is why houses are expensive. You are paying for the planning permission.

YOU IDIOTS OUT THERE RUNNING THE SYSTEM.....START GRANTING MORE PLANNING CONSENTS!!!!!

 

[pipme]

In your example pip I guess the 57,000 represents the developers premium. What he pockets for doing the building on the site.

The land value already contains the planning permission premium. In our neighbours case, the site without permission would be worth perhaps 15,000. So the value of that little bit of paper is 135-185,000. This is why houses are expensive. You are paying for the planning permission.

YOU IDIOTS OUT THERE RUNNING THE SYSTEM.....START GRANTING MORE PLANNING CONSENTS!!!!!

Yes I beleive potential / permissioned land is far over priced

No, I think the £57k is the perceived extra location value a purchaser may stump up...

I reckon the insurance rebuild valuation, although incorporating site clearance component, will include 'builders profit'.

The actual land prices from land registry comprises Value of land for residential development as at October 2003, by region, for small sites, bulk land, Sites for flats or maisonettes. Not definitive but I would guess not a mile in error. .... And from the same site :- http://www.voa.gov.uk/council_tax/how_your_property_is_valued.htm
P

 

[Damocles]

I was thinking in terms of: guy buys piece of ground with consent. Pays builders to do the work (they get their profit). Sells house. makes money. Lots and lots of profit for everyone.

It is not an exact science.

 

[pipme]

From family involvement in property development -- Project management is crucial !!

 

[Damocles]

and quite profitable