How will it affect lenders and borrowers?
The vast bulk of unproductive sites, including those held for speculative gain or in anticipation of upzoning, would come onto the market. Unimproved land values therefore would initially fall which would in turn make them more accessible to all, whether first home buyers or commercial enterprises. The site rent, being based initially on a percentage value therefore would probably produce less revenue from existing occupied or utilised sites, but since there would be a large increase in the number of utilised sites, the total revenue would remain or more likely increase. The cost of mortgages would drop because the land component would cost less – and in a very short space of time, it’s sale price would drop to zero and all you would be paying would be its annual rental value. In this scenario, you would only be borrowing to the value of a year’s site rent at the most for the land component, after which time you would more than likely earned enough to easily afford the next years renta
