Findings in title quoted from the authors’ linked content.^1,2

From the linked summary:^1

>Our research compared 22 publicly available national datasets, looking at the period between 1998 and 2020.

>One of the datasets is known as gross fixed capital formation (GFCF) of new homes, which is published by the Office for National Statistics and reflects the sale prices of new houses minus the land prices.

>It includes the costs of things like labour, materials and subcontractors, plus whatever profit the builder makes from the sale.

>We also compared GFCF per dwelling to the Royal Institute of Chartered Surveyors’ (RICS) index.

>We were able to calculate land prices by working out GFCF per new dwelling and deducting this from the average price of new houses in a given year.

>This clearly demonstrated that the land price per house has flatlined since 1998 at £48,000 per home, per the graph below (land prices are the green line).

From the peer-reviewed paper:^2

>Prices of components, other than land value, are obtained from gross fixed capital formation data and construction output.

>When corrected for inflation, these have risen by factors of 1.7 and 2.0, respectively, over 1998–2018.

>By including the self-employed, the total labour per new-build private dwelling is derived which has risen 2.4 to 3.0 man-years over 2011–2020.

>Since 2000, construction companies’ gross operating surplus per job has risen much faster than compensation of employees per job.

>This extra gross operating surplus, which can be associated with profit, totalled £11.6b in 2019 reaching £70k (at 2016 prices) per new private dwelling in 2019.

>Rising prices have created the opportunity for housebuilders to extract larger profits.

^1 Builders are making thumping profits by over-charging for new homes – new findings, Simon Roberts and Colin Axon, 7 Mar. 2023, https://theconversation.com/builders-are-making-thumping-profits-by-over-charging-for-new-homes-new-findings-200750

^2 Roberts, S. and Axon, C. (2022) Analysing the rising price of new private housing in the UK: A national accounting approach. Habitat International 130 102690. https://doi.org/10.1016/j.habitatint.2022.102690