I fail to see the difference, maybe you could expand?
> In a rural area, if it really comes down to it, people buy
Folks are seeking affordable rents because affordable (and habitable) property to buy is pretty much non-existent.
> or rent a plot of land and throw a prefab home or trailer on it.
Perhaps in your country, good luck with getting away with that in the UK. We've got some fairly strict planning rules that make that kinda thing more or less impossible. Also "renting a plot of land" for this type of use isn't really a thing here.
The remaining available/eligible land is held by large house builders in their "land banks". Some of these tracts of land have been off the market for years and years, yet nothing ever gets built on them until the house builder decides the time is right to screw the maximum price out of buyers.
I'm kinda hoping that when Scotland does finally become independent we will solve these problems with radical land ownership reform.
Usually you deal with bad 'land hoarding' with a high enough property tax rate. And if you want to avoid effecting the old and the middle class, you add exemptions for primary residences.
Council Tax - a tax on residential properties. Properties fall into one of eight bands, A to H, where A is the least expensive and H is the most expensive. Your council tax bill is made up of the council tax itself which is the largest portion (goes to the council to pay for schools, libraries, street lights, etc). The remaining portion pays for water and sewerage.
Non Domestic Rates - businesses pay these. Water and sewerage are payable in addition. I don't know the ins and outs of how they're calculated.
Unfortunately land hoarding is an unresolved issue in the UK, there isn't as far as I know any penalty or charge - much of this land has no services or business activity so can't be taxed. There have been suggestions by some UK members of parliament that house builders should be forced into a "use it or lose it", thus far there's not been any official position from the government. I suspect the issue will be swept under the table until the next time the media hoves round and puts this back in the spotlight again.
It's considerably less built up than most people think [1-2]. The problem is that our planning laws do not realise that farmland is an ecological desert, and so we're not allowed to build on most of the UK, pushing the value of the little land that can be built on through the roof.
[1] http://www.bbc.co.uk/news/uk-18623096
[2] https://www.telegraph.co.uk/finance/newsbysector/constructio...
Yes. That's what I was explaining. You can just do that in many rural areas of the U.S.
That's the big difference compared to urban development. You don't need billion dollar loans and a lobbying firm to add solve the problem on the supply side. It's very common for semi-retired middle class people to buy undeveloped land with good highway access, subdivide it, add some housing, and flip it.
But "rural" in the US and "rural" in the UK are orders of magnitude apart. There are individual ranches in Texas larger than whole counties in the UK. The kinds of nomadic people that provoke anti-camping laws require a certain population density to support their lifestyle, so in the US, it's usually the NIMBYs that try to ban certain kinds of dwellings on other people's land. It's a question of how many people would even know something is there. If you never even see your mail carrier, you're not going to have a problem erecting any sort of building you want. But if you have neighbors that can see your dwelling from theirs, they will be interested in your private business.
So if you're in the middle of the wind farms and corn farms in northern Indiana, no one cares if you have a manufactured home on your land. If you're on undeveloped land just east of Denver, you can't even pitch a tent on your own property without a permit.
Expensive rent in a rural area means people get pushed further away. In the medical practice that my mom worked at, employees commuted as far as 100 miles.
The land as you state is a different story. I love the idea of a disposable trailer home I could replace every 20-30 years with new technology, unfortunately due to social attitudes prefab homes are almost exclusively marketed and built for lower incomes.
Sorry my comment was ambiguous
The land itself does.
Of course, if you keep your home in good repair and updated to modern standards, that will help retain value. But you're effectively selling a new home at that point, and the costs you have sunk into keeping in that way extend well beyond the original value.
Land value is where you normally find the appreciation. The trouble with trailers in a trailer park is that you do not own the land, so what you bear is entirely structure depreciation.
Erm....have you seen what the property market is like in the UK. Most, if not all, property appreciates with little or no major expenditure.
There are exceptions. Markets can do funny things from time to time, form irrational bubbles and whatnot. Even cars sometimes appreciate without any major repair or refurbishment costs. Tulips were once an appreciating asset, as the story goes. But as a rule, things that become outdated, wear out, and die lose value over time.
The reason for this is that it's pretty damned difficult to separate the two, especially physically. Planning laws generally discourage complete demolition of dwellings unless they're pretty much near collapse or there's been a fire that's gutted the place or in more extreme circumstances perhaps all or part of the house has fallen into a sink hole.
In the UK, residential property (the structure bit) is, and has for a long time now been seen as an appreciating asset/investment. As I already said earlier, property here, if lived in and sensibly maintained, isn't considered something that "wears out" like a car body.
It sounds like you're not from the UK so maybe all this is an alien concept.
Edit: I forgot to mention that things get a wee bit more complex, especially in England and Wales because whilst you might own the structure, it's quite common that don't own the land it sits on. This is known as a leasehold, as opposed to a freehold where you the purchaser own the land as well as the building. Buyers of properties that are leasehold purchase their dwelling (typically with a mortgage) but also pay an annual ground rent to the leaseholder by way of a very long term lease (say 99+ years). Once upon a time the ground rent on the lease hold used to be a nominal amount of money, say GBP100/year. However...capitalism being capitalism, it's becoming more common for leasehold ground rent to be seen by certain investment houses as a nifty way of getting paid for doing bugger all. This can and has caused annual ground rents to increase to quite piss-taking levels.
There are some attempts to get parliament to reform this leasehold situation after it was found that new-build housing estates were being sold to buyers on a leasehold basis but the leasehold condition is not made clear to purchasers. It's sneaky, and another way for house builders to extract another bundle of cash by selling off new-build estate leaseholds to some offshored company for a tidy sum leaving the buyers high and dry. It's often possible to buy out the leasehold, but even in the first year of ownership the cost can be prohibitive, especially after shelling out for your new house. It's not unheard of for leaseholders to charge say GBP5000-7000 in the first year and then double the cost each year afterwards, often locking buyers into the leasehold until they're able to sell the property. Then there's also problems and costs associated with renewing a leasehold, but that's a whole other expensive and morale sapping thing.
You are right that I am not from the UK, so perhaps things are different (lots of room for local exceptions, as detailed in previous comments), but where I am from people compare the cost of a home against the cost of other homes, including the cost of buying vacant land and building a new home. The value of the land is implicitly considered because they see the actual value of land when looking at vacant lots and weigh their options.
Wear isn't the only consideration. An old home with low-amperage electricity service and nob and tube wiring that could burn down your home at any minute is less valuable than a home that is up to modern building standards. An old home with virtually no insulation is less valuable than a modern home that is airtight. These older features are more expensive to live with (higher insurance costs, higher energy costs, etc.) and the price has to reflect that. Same reason why a pristine car from the 80s is, in most cases (unless it has special collector value), still going to be worth less than a brand new model of equal original value in constant dollars.
To put it another way, I live in a rural area. The value of my property would be worth almost ten times more if the identical house was situated on land in the nearest major city. The value is the land and where that land is located, not the structure. The structure itself is, in this hypothetical example, identical. If we tore down the houses in both spots, the vacant lot in the major city would still be worth almost ten times more than my now-vacant lot. Houses can be moved – location is the value.
> As I already said earlier, property here, if lived in and sensibly maintained, isn't considered something that "wears out" like a car body.
Even on the timescale of centuries? I don't see many century homes that haven't required major and costly updates to be still usable today. I don't think anyone is suggesting that houses deprecate as quickly as cars.
There are exceptions. Price, of course, is still bound by supply and demand. There are reasons why used home structures may become scarce, while new homes are impossible to build, forcing people to compete for used homes. But this is not exactly typical.
Well....centuries depends on how many centuries and what revolutions, unrest and discord might arise :)
The village I live in (as were a few around this area), was completely razed to the ground during the 1715 Jacobite rebellion. So things kinda hard to start again and many of the houses in the core of the village were rebuilt between 1730'ish to the early 1800's. These old houses are highly valued, also the core village is also an architectural conservation area.
I could discuss this stuff forever but I need to get stuff done today :)
Most value of residential property is in the structure. $/sqft of space is the metric, not the land plot.
I'd rather live in a proper house. But it's pretty common for working class rural Americans to live in mobile or prefab homes on nice properties with gardens, fruit trees, hiking trails, sheds for four wheelers, etc.
Trailer parks, which are dense neighborhoods of mobile homes or tailers, tend to be less nice and inhabited by people in poverty. Though they often have other options, like absolute run-down shacks way outside town.
Point being, there's some distinction in practice and I won't begrudge people living within their means.