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Yellow Fever

The Housing Shortage

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Posted (edited)
1 hour ago, Aggy said:

Ah yes an article from 2019 proving your argument that developers are using this to get round a law which came in… after 2019.

And your example of being in one park of 300 chalets is absolutely definite proof that modular homes do in fact make up more than <2 per cent of new homes each year.

Good arguments.

Which bit of 'Last week, I was literally sitting in a chalet in a park of about 300 similar chalets where the park is having properties added at a rapid rate' did you have trouble understanding?' Let me assure you that the model described in the article of only five years ago is still the model that the park I was talking about is working on. They currently have 53 other parks in the same company operating on the same model. And like I said, they're growing.

It's a substantial amount and, like I said, every single person that has one is locked into ground rent and subject to the rules set by the land owners. This applies now to both new and older ones, so clearly whatever legislative changes have happened since 2019 don't affect the specifics here regarding the ground rent changes applied.

Aside from that, I don't recall making any assertions about this specific issue pertaining to what percentage of the overall development industry it accounts for at all, so not sure why you're trying to pick an argument about percentages here. I don't see that as particularly important, seeing as every single new property in action like this is another pensioner having their pension milked for the ground rent for the benefit of private companies with not a lot in the way of staff or overheads.

 

Edited by littleyellowbirdie

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Posted (edited)
4 hours ago, littleyellowbirdie said:

I think it's possibly to disappear down a real rabbit hole breaking down that statement, so I'll just say I don't fully disagree with it without fully agreeing with it either.

Hahaha.  I'm going to explain my thoughts, not becaus it is massively relevant but because its 5 pm on a Friday, the sun is out and I don't want to work right now.

There were no traditional front lines in Vietnam and so no easy way of telling  who was winning.  McNamara came from Ford motors (or was it GM?) and was used to spreadsheets that measured success so demanded the metrics for the war.

What he got was regular body counts.  The higher the body count the better, he thought, even more so if the differences between ours and theirs were big.  Of course this led to US troops fragging anything that moved and generally making everyone hate them, all whilst  ignoring things that might actually work but which are not easily measured or put in a nice graph.

In the end mcnamara lost the ability to see stats as a tool and saw them as an outcome in their own right. This deluded him into thinking the war was being won  and just a bit more, a few more troops and a bit more time would do it

We risk doing the same with housing. If we just count houses or total new  builds we might think we have got it about right but as has been said here a lot, not all houses are equal, we need some houses more than others and we need houses in some places and not in others.  Sure, we could build a 100 storey block in Stockton on tees and house 1000s; That would look good on a chart, but is it actually useful to do that?

Likewise,  brexit may or may not cause GDP to drop but does GDP tell us everything we need to know or do we grab hold or this chart or that chart to prove a point and delude ourselves as to its real importance?

The sun is shining, I'm contributing nothing to the economy right now so my chart looks bad- but I'm pretty content. I'm not intending to spend any cash ahead of the Preston game either but I know life will be good after it...

 

Edited by Barbe bleu
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2 minutes ago, Barbe bleu said:

Hahaha.  I'm going to explain my thoughts, not becaus it is massively relevant but because its 5 pm on a Friday, the sun is out and I don't want to work right now.

There were no traditional front lines in Vietnam and so no easy way of telling  who was winning.  McNamara came from Ford motors (or was it GM?) and was used to spreadsheets that measured success so demanded the metrics for the war.

What he got was regular body counts.  The higher the body count the better, he thought, even more so if the differences between ours and theirs were big.  Of course this led to US troops fragging anything that moved and generally making everyone hate them, all whilst  ignoring things that might actually work but which are not easily measured or put in a nice graph.

In the end mcnamara lost the ability to see stats as a tool and saw them as an outcome in their own right. This deluded him into thinking the war was being won  and just a bit more, a few more troops and a bit more time would do it

We risk doing the same with housing. If we just count houses or total new  builds we might think we have got it about right but as has been said here a lot, not all houses are equal, we need some houses more than others and we need houses in some places and not in others.  Sure, we could build a 100 storey block in Stockton on tees and house 1000s; That would look good on a chart, but is it actually useful to do that?

Likewise,  brexit may or may not cause GDP to drop but does GDP tell us everything we need to know or do we grab hold or this chart or that chart to prove a point and delude ourselves as to its real importance?

The sun is shining, I'm contributing nothing to the economy right now so my chart looks bad- but I'm pretty content. I'm not intending to spend any cash ahead of the Preston game either but I know life will be good after it...

 

I think that's a great post well worth writing. It was the general statement afterwards that I just felt was a little bit too broad.

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5 hours ago, Barbe bleu said:

Does this necessarily follow?

Sure having a big workforce drives up GDP and mitigates for an ageing population so the figures will work but does a high GDP equate to higher living standards? Is there often some value in the free things that no amount of accounting can really capture. Is it OK if we have less cash in our bank if we get to spend it on what we want rather than on rent that goes to an increasingly select few?

It does if you look at the full sentence:

"If you wished to limit immigration in the future you would have to accept much lower living standards or properly prepare the economy with massive investment in technology and training, but this would take at least a decade."

If you stopped immigration suddenly the economy would move quickly into recession + some sectors - e.g health and social care would be in a crisis which makes the current situation seem like paradise! Other industries would also be affected very badly - e.g hospitality + some parts of agriculture + there are many other areas where we use migration to circumnavigate skills shortages.

In the longer term, a period of prolonged investment and training might make growth with minimal migration possible but Britain's record on productivity growth and investment has been pretty poor for a long while, so it would take a different approach to what has been practiced in recent years (back to Ed Balls' "neo-endogenous growth strategy." 😄).

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5 hours ago, Barbe bleu said:

Is there often some value in the free things that no amount of accounting can really capture. Is it OK if we have less cash in our bank if we get to spend it on what we want rather than on rent that goes to an increasingly select few?

I take your broader point about measuring living standards using non-financial means (although economists would argue that they, unlike accountants, do take "welfare" into account - externalities).

I agree that lower migration would lower demand for rented housing (mainly) but I suspect that it would not do so to a great extent and certainly not enough to compensate for the economic disruption caused by any sudden major limitation on immigration. However, this is where you need the economic modeller and quantitative economists with better research (and maths) than me 😃)

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2 hours ago, littleyellowbirdie said:

Which bit of 'Last week, I was literally sitting in a chalet in a park of about 300 similar chalets where the park is having properties added at a rapid rate' did you have trouble understanding?' Let me assure you that the model described in the article of only five years ago is still the model that the park I was talking about is working on. They currently have 53 other parks in the same company operating on the same model. And like I said, they're growing.

It's a substantial amount and, like I said, every single person that has one is locked into ground rent and subject to the rules set by the land owners. This applies now to both new and older ones, so clearly whatever legislative changes have happened since 2019 don't affect the specifics here regarding the ground rent changes applied.

Aside from that, I don't recall making any assertions about this specific issue pertaining to what percentage of the overall development industry it accounts for at all, so not sure why you're trying to pick an argument about percentages here. I don't see that as particularly important, seeing as every single new property in action like this is another pensioner having their pension milked for the ground rent for the benefit of private companies with not a lot in the way of staff or overheads.

 

If it’s a residential dwelling “sold” by the grant of a long lease, they can’t charge a ground rent. The only way your examples can charge a “ground rent” is if they aren’t dwellings.

You’re talking about pitch fees at mobile park home sites - there is separate legislation which deals with those. Looking at the government’s figures from 2022, around 159k people live in park homes - so around 0.3 per cent of the population. And the majority of those are retirement schemes.

The reason I’m mentioning percentages is that the park home sector is tiny. If it was the case that developers were trying to “get round” the law change banning them from granting leases with a ground rent by building park homes on wheels instead, there’d be more park homes. The big house builders aren’t building park homes - and the example of a park home business you’ve provided must surely have been in business since before the ground rent law change if it has got 50 sites (so just continuing to expand its existing business, not changing its practices to try and get round the law change).

I haven’t seen anything suggesting developers are trying to get round the ground rent law change in such a way (and worth also noting that a lot of the big house builders had already started moving away from ground rents before the law change given public perception of them). 

More generally on park homes - the occupant doesn’t own the land. You own the temporary structure on the land. You can’t get a mortgage. They don’t really increase in value so aren’t much of an investment. You also have to pay a chunky commission if you sell. I don’t see it as being a serious solution to the housing shortage more widely. Where it may have some significance is in the retirement sector. A lot of park home sites are already over-55 only - if you’re downsizing, have the spare cash, and don’t really need an investment as such, then they perhaps make some sense. 

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Posted (edited)
26 minutes ago, Aggy said:


You’re talking about pitch fees at mobile park home sites - there is separate legislation which deals with those. ground rent law change if it has got 50 sites (so just continuing to expand its existing business, not changing its practices to try and get round the law change).

 

Oh,  sorry. I thought you were making a serious point rather than picking over semantics. I apologise for the misunderstanding.

'A monthly payment to the land owner/free holder for very little in return'. Better?

Edited by littleyellowbirdie

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3 hours ago, Barbe bleu said:

Hahaha.  I'm going to explain my thoughts, not becaus it is massively relevant but because its 5 pm on a Friday, the sun is out and I don't want to work right now.

There were no traditional front lines in Vietnam and so no easy way of telling  who was winning.  McNamara came from Ford motors (or was it GM?) and was used to spreadsheets that measured success so demanded the metrics for the war.

What he got was regular body counts.  The higher the body count the better, he thought, even more so if the differences between ours and theirs were big.  Of course this led to US troops fragging anything that moved and generally making everyone hate them, all whilst  ignoring things that might actually work but which are not easily measured or put in a nice graph.

In the end mcnamara lost the ability to see stats as a tool and saw them as an outcome in their own right. This deluded him into thinking the war was being won  and just a bit more, a few more troops and a bit more time would do it

We risk doing the same with housing. If we just count houses or total new  builds we might think we have got it about right but as has been said here a lot, not all houses are equal, we need some houses more than others and we need houses in some places and not in others.  Sure, we could build a 100 storey block in Stockton on tees and house 1000s; That would look good on a chart, but is it actually useful to do that?

Likewise,  brexit may or may not cause GDP to drop but does GDP tell us everything we need to know or do we grab hold or this chart or that chart to prove a point and delude ourselves as to its real importance?

The sun is shining, I'm contributing nothing to the economy right now so my chart looks bad- but I'm pretty content. I'm not intending to spend any cash ahead of the Preston game either but I know life will be good after it...

 

Very good point. It's just an anecdote but is interesting nevertheless - I was watching a series of videos on YouTube by a bloke called bald and Bankrupt. He went around some of the grimmest towns and cities, talking to the locals that live there. In all his videos there are streets and streets of bordered up housing, run down, desolate, windows smashed out and uncared for. One wonders why these can't be done up and sold off cheaply, and I think the answer is thy are in locations where people don't want to live (or can't) because there are no jobs there. Housing has to be targeted. Anywhere will not do.

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2 hours ago, Badger said:

It does if you look at the full sentence:

"If you wished to limit immigration in the future you would have to accept much lower living standards or properly prepare the economy with massive investment in technology and training, but this would take at least a decade."

If you stopped immigration suddenly the economy would move quickly into recession + some sectors - e.g health and social care would be in a crisis which makes the current situation seem like paradise! Other industries would also be affected very badly - e.g hospitality + some parts of agriculture + there are many other areas where we use migration to circumnavigate skills shortages.

In the longer term, a period of prolonged investment and training might make growth with minimal migration possible but Britain's record on productivity growth and investment has been pretty poor for a long while, so it would take a different approach to what has been practiced in recent years (back to Ed Balls' "neo-endogenous growth strategy." 😄).

Perhaps in summary, blanket immigration is not the answer. Targetted at the right skillset it is, would you agree?

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Posted (edited)
14 hours ago, littleyellowbirdie said:

Oh,  sorry. I thought you were making a serious point rather than picking over semantics. I apologise for the misunderstanding.

'A monthly payment to the land owner/free holder for very little in return'. Better?

So which developers are getting round the ground rent law change by setting up park homes?

So far you’ve only mentioned one park home operator who was operating park homes before the ground rent law changes anyway. And you’ve tried to dismiss the stats showing park homes continue to be a tiny fraction of new builds.

There aren’t any are there?

 

Edited by Aggy

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14 hours ago, Rock The Boat said:

Very good point. It's just an anecdote but is interesting nevertheless - I was watching a series of videos on YouTube by a bloke called bald and Bankrupt. He went around some of the grimmest towns and cities, talking to the locals that live there. In all his videos there are streets and streets of bordered up housing, run down, desolate, windows smashed out and uncared for. One wonders why these can't be done up and sold off cheaply, and I think the answer is thy are in locations where people don't want to live (or can't) because there are no jobs there. Housing has to be targeted. Anywhere will not do.

While I agree with your last two sentences, it isn’t just thinking about where you build the houses as such. It’s also whether new jobs can be created in the area and things like whether you can rejuvenate high streets to make it a more appealing place to live. You might not mind a longer commute if you’ve got nice things to do near you at the weekend.

Often you get planning issues stopping the first point…

Near me recently there was a run down, old council estate whose inhabitants raised all sorts of objections to a proposed development turning an abandoned car warehouse (which was bordered up and frankly just looking a mess) into life science labs and a couple of shops and bits and bobs like that. It was virtually city centre and the estate was on a main road near the university and hospital - so not countryside quiet. Would have created hundreds of jobs (many of which could have been filled by locals) but still got objections.

A bit further out, an industrial development on greenbelt land (which I appreciate is a bit more controversial) would have created over 1,500 jobs near a deprived area.

One I’ve been involved in in the West Midlands saw a large industrial estate  built as well as a large housing development around it - with schools, pharmacies, shops etc. The industrial estate has created thousands of jobs plus those in the schools, shops etc. and the houses are very popular.

And then you see city centres and big towns trying to rejuvenate high streets by turning the old abandoned retail into more “activity” based things - can that filter down into the smaller towns? Can there be tax / rates cuts to attract businesses and retailers? Etc etc.

 

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Posted (edited)
54 minutes ago, Aggy said:

So which developers are getting round the ground rent law change by setting up park homes?

So far you’ve only mentioned one park home operator who was operating park homes before the ground rent law changes anyway. And you’ve tried to dismiss the stats showing park homes continue to be a tiny fraction of new builds.

There aren’t any are there?

 

 

I think we need to agree a definition of 'developer', so we'll keep it simple and use the first dictionary definition I can find on google. Here's one: A person who develops real estate, especially by preparing a site for residential or commercial use.

The site owners I'm talking are clearly developers, who are developing land to provide pitches for residential accomodation in the way of prefab houses with a teensy set of wheels on them, not temporary accomodation or holiday accommodation, hence why I've brought it up in a thread called 'the housing shortage', for people with which they have to pay monthly fees ad infinitum and have to conform to rules set by the landowners in a fashion very similar to leasing, albeit subject to different legislation as some pedants may be wont to make a big thing of for reasons known only to themselves.

Oh and incidentally, I checked and pitch fees are often also referred to as ground rent, even by lawyers, which makes sense given that pitches are allotted areas of ground. https://parkhomemagazine.co.uk/legal/pitch-fees-on-residential-parks-key-questions-answered/ I suspected this might be the case given that my uncle does actually live in one, pays this monthly, and described it to me as 'ground rent', which I would suspect he picked up from the bills from the site owners and/or the contract agreement and conversations when signing up.

But ironically, your excessive pedantry is actually reinforcing my point that to all intents and purposes residential parks are creating a leasehold freehold situation that is technically not subject to that legislation, which arguably should be. A loophole, if you will.

There are 827 such residential parks in the UK at the moment. I've no idea what the average size is, but just guessing that Hoo Marina is average on the basis it's a very densely populated, although I suspect it might be on the smaller side given land prices and availability there, that's an estimate of 250,000 such park homes out of 24.8 million houses in the UK, making it probably about 1% of all UK housing, which is growing because places like this are being actively developed. Assuming my uncle's ground rent is typical, about £200 a month, that's 2,400 quid a year out of his pension, then that's a sector turnover of about 600 million quid a year employing very few people, so you dismiss it if you will, but personally it bothers me as being exploitative.

 

Edited by littleyellowbirdie

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15 hours ago, Rock The Boat said:

Perhaps in summary, blanket immigration is not the answer. Targetted at the right skillset it is, would you agree?

If I were to summarise it myself, I would say that if the country wishes to ends its total reliance on imported labour it needs to greatly increase investment to increase productivity and skills. This will take at least a decade imo.

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Posted (edited)
1 hour ago, littleyellowbirdie said:

 

I think we need to agree a definition of 'developer', so we'll keep it simple and use the first dictionary definition I can find on google. Here's one: A person who develops real estate, especially by preparing a site for residential or commercial use.

The site owners I'm talking are clearly developers, who are developing land to provide pitches for residential accomodation in the way of prefab houses with a teensy set of wheels on them, not temporary accomodation or holiday accommodation, hence why I've brought it up in a thread called 'the housing shortage', for people with which they have to pay monthly fees ad infinitum and have to conform to rules set by the landowners in a fashion very similar to leasing, albeit subject to different legislation as some pedants may be wont to make a big thing of for reasons known only to themselves.

Oh and incidentally, I checked and pitch fees are often also referred to as ground rent, even by lawyers, which makes sense given that pitches are allotted areas of ground. https://parkhomemagazine.co.uk/legal/pitch-fees-on-residential-parks-key-questions-answered/ I suspected this might be the case given that my uncle does actually live in one, pays this monthly, and described it to me as 'ground rent', which I would suspect he picked up from the bills from the site owners and/or the contract agreement and conversations when signing up.

But ironically, your excessive pedantry is actually reinforcing my point that to all intents and purposes residential parks are creating a leasehold freehold situation that is technically not subject to that legislation, which arguably should be. A loophole, if you will.

There are 827 such residential parks in the UK at the moment. I've no idea what the average size is, but just guessing that Hoo Marina is average on the basis it's a very densely populated, although I suspect it might be on the smaller side given land prices and availability there, that's an estimate of 250,000 such park homes out of 24.8 million houses in the UK, making it probably about 1% of all UK housing, which is growing because places like this are being actively developed. Assuming my uncle's ground rent is typical, about £200 a month, that's 2,400 quid a year out of his pension, then that's a sector turnover of about 600 million quid a year employing very few people, so you dismiss it if you will, but personally it bothers me as being exploitative.

 

So… which developers are doing this to get round the changes to the ground rent law?

Edit: and I don’t see any excessive pedantry. You claimed developers were getting round changes to ground rent laws by building park homes. Your “evidence” is park home operators who operated park homes before the law changes continuing to operate park homes after. Your claim is simply wrong.

Edited by Aggy

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8 minutes ago, Badger said:

If I were to summarise it myself, I would say that if the country wishes to ends its total reliance on imported labour it needs to greatly increase investment to increase productivity and skills. This will take at least a decade imo.

People will need to have more kids as well; the UK's domestic population breeds at a rate lower than that needed for replacement.

which leads back to the lack of available affordable housing from which young couples can start a family.

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Posted (edited)
42 minutes ago, Aggy said:

That’s just a list of park home operators. Which ones were not operating park homes before the ground rent rules changed? 

Yup, and the park home operators are the developers of the sites, having developed the land into residential park home sites to operate, while also continuing to buy new land to develop as new residential park home sites.

You also have to buy the prefab from them, giving captured sales for an initial markup on the prefab itself.

These guys have 54 in the one company.

https://berkeleyparks.co.uk/our-parks/

And they're even bricked up around the sides, showing that the wheels are really only about the legal fiction that puts them outside the law regarding traditional static dwellings, which is my main point.

Owners can't do anything, solar panels or even changes to the tiny gardens without the permission of the site owners, just like in a rental situation, let alone a lease. All this while subject to something that amounts to a land value tax payable to a private landowner rather than government.

Hats off to them. It's a great model to make money for old rope in perpetuity. Shouldn't be legal though.

Edit: And here's a brand new site, just in case you're still under the misapprehension this isn't a current practise for providing new housing. https://oakdaleplace.co.uk/

Edited by littleyellowbirdie

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4 hours ago, littleyellowbirdie said:

 

 

I suspect you’re back in wind up merchant mode to try and avoid saying you were wrong, as I think you’re probably intelligent enough not to be as confused as your posts suggest.

If I owned an off-licence and the government banned pubs and bars in order to stop people consuming alcohol on site, would you suggest my continued use of my shop as an off-licence was trying to get round the law change banning alcohol consumption on-site? 

Park home developers are unaffected by the ground rent law changes, so don’t need to “get round” the change in ground rent law. Developers of traditional homes are affected by the ground rent changes but are not building park homes to get round the ground rent changes. So one group isn’t and the other doesn’t need to.  

Park homes also continue to be a tiny percentage of the market and almost exclusively aimed at over 55s- no developers are using them as an alternative to traditional housing because they can no longer charge ground rents.

So, I’ll ask again, which developers are developing park homes to get round the ground rent law change as you stated? 

 

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Posted (edited)
4 hours ago, littleyellowbirdie said:

 

 

 

As for park homes more generally, I’ve already posted my thoughts on them. Are they exploitative? Possibly yes to an extent but for the reason that they need to have some form of income generation to be developed. They are predominantly retirement schemes (both links you posted above operate sites for over 50/55s).
 

One of the main other retirement scheme models sees people buy a long lease for a premium, and then have to sell it back to the developer when they move out (or their estate sells it if they die) for 90 per cent of what they bought it for. Most retirement development schemes need some form of income generation to be viable/to attract investors to fund - if they had to sell up front with no future income generation, the developments  wouldn’t get off the ground.

So if park homes were unable to charge the fees they do, I suspect there would become even fewer of them

The flip side with park homes is that you get to live in something that cost you a lot less upfront than a “traditional” house, which is useful when you’re a retiree downsizing and unable to get a mortgage.

As I mentioned though, the reality is that for this reason (and the fact you can’t get a mortgage on one) park homes aren’t close to becoming a solution for the housing shortage. They are though a potential option for building much needed retirement living stock, which in turn would free up residential accommodation.

 

Edited by Aggy

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Posted (edited)
3 minutes ago, Aggy said:

I suspect you’re back in wind up merchant mode to try and avoid saying you were wrong, as I think you’re probably intelligent enough not to be as confused as your posts suggest.

If I owned an off-licence and the government banned pubs and bars in order to stop people consuming alcohol on site, would you suggest my continued use of my shop as an off-licence was trying to get round the law change banning alcohol consumption on-site? 

Park home developers are unaffected by the ground rent law changes, so don’t need to “get round” the change in ground rent law. Developers of traditional homes are affected by the ground rent changes but are not building park homes to get round the ground rent changes. So one group isn’t and the other doesn’t need to.  

Park homes also continue to be a tiny percentage of the market and almost exclusively aimed at over 55s- no developers are using them as an alternative to traditional housing because they can no longer charge ground rents.

So, I’ll ask again, which developers are developing park homes to get round the ground rent law change as you stated? 

 

Really? After you come in with a 'not really', dismiss it like it doesn't it exist, argue with all of my word usage with things like  'what you mean is pitch fees, not ground rent', you say I'm in wind up merchant mode?

Edit: Thanks for that. This pinging up just distracted me when we scored.

 

Edited by littleyellowbirdie

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1 minute ago, littleyellowbirdie said:

Really? After you come in with a 'not really', dismiss it like it doesn't it exist, argue with all of my word usage with things like  'what you mean is pitch fees, not ground rent', you say I'm in wind up merchant mode?

 

Yes. Nobody has said they don’t exist. The “not really” was in response to your claim that developers are using park homes to get round the ground rent law changes. You still haven’t shown one example of that. You do though continue to post posts like this.

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Posted (edited)
3 minutes ago, Aggy said:

Yes. Nobody has said they don’t exist. The “not really” was in response to your claim that developers are using park homes to get round the ground rent law changes. You still haven’t shown one example of that. You do though continue to post posts like this.

Yes. And as I've explained, the operators of these parks are the developers I'm talking about when I said 'developers'. Those 80 parks owned by Berkley Parks didn't appear out of thin air, or the brand new one I linked to.

Anyway, really not the time for this.

Edited by littleyellowbirdie

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2 minutes ago, littleyellowbirdie said:

Yes. And as I've explained, the operators of these parks are the developers I'm talking about when I said 'developers'. Those 80 parks owned by Berkley Parks didn't appear out of thin air, or the brand new one I linked to.

Anyway, really not the time for this.

Understood.  The developers building park homes to ‘get round the law changes banning ground rents’ are developers who were unaffected by the ground rent law changes and who were building park homes before those changes anyway. Makes sense.

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Posted (edited)
4 minutes ago, Aggy said:

Understood.  The developers building park homes to ‘get round the law changes banning ground rents’ are developers who were unaffected by the ground rent law changes and who were building park homes before those changes anyway. Makes sense.

Thank you. Sorry. I'm so used to people picking small holes in what I say I may sometimes take it the wrong way when someone's being genuine, which I suspect I may have done this time.

Edited by littleyellowbirdie

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