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Author Discussion

Bill

Original Poster:

31,412 posts

138 months

[news] 
Saturday 23rd October 2010 quote quote all
Continued from here

Edited by Bill on Saturday 23 October 11:24

Sam_68

9,939 posts

128 months

[news] 
Saturday 23rd October 2010 quote quote all
NoelWatson said:
Hobo said:
Times may be hard, but its certainly not all doom & gloom.
Well someone, somewhere must be suffering? (...quote of year on year completions...)
Yes indeed. There are critical problems in the housebuilding industry at the moment, but they don't lie where you think they do, Noel.

Don't get me wrong, times are tough, and (joking aside) selling houses isn't easy, but its a long, long way from being our biggest problem in the industry right now.

VX Foxy

3,385 posts

126 months

[news] 
Saturday 23rd October 2010 quote quote all
Sam_68 said:
Don't get me wrong, times are tough, and (joking aside) selling houses isn't easy, but its a long, long way from being our biggest problem in the industry right now.
(joking aside) What do you see as your biggest problem?

Jobbo

8,494 posts

147 months

[news] 
Saturday 23rd October 2010 quote quote all
The big problem is lack of first time buyers, is it not? There's some churn in the market as people downsize but that's the only factor driving sales, as I see it.

Sam_68

9,939 posts

128 months

[news] 
Saturday 23rd October 2010 quote quote all
VX Foxy said:
(joking aside) What do you see as your biggest problem?
Planning.

For a variety of reasons, the system is so fked up at the moment that it's just not funny. frown

Ability to sell houses isn't even close to being the biggest limitation to our completions figures: it's actually obtaining permission to build them in the first place that's far and away our greatest difficulty.

Followed, probably, by the related issue of obtaining land suitable to build them on, that has any chance whatsoever of delivering Planning in the short to medium term.

If the economy does begin to make any sort of significant recovery within the next couple of years, there's a serious risk of another bubble for the simple reason that the housebuilders won't be able to get anywhere near meeting demand due to a huge shortfall in Planning numbers.
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scenario8

3,763 posts

62 months

[news] 
Saturday 23rd October 2010 quote quote all
Sam_68 said:
VX Foxy said:
(joking aside) What do you see as your biggest problem?
Planning.

For a variety of reasons, the system is so fked up at the moment that it's just not funny. frown

Ability to sell houses isn't even close to being the biggest limitation to our completions figures: it's actually obtaining permission to build them in the first place that's far and away our greatest difficulty.

Followed, probably, by the related issue of obtaining land suitable to build them on, that has any chance whatsoever of delivering Planning in the short to medium term.

If the economy does begin to make any sort of significant recovery within the next couple of years, there's a serious risk of another bubble for the simple reason that the housebuilders won't be able to get anywhere near meeting demand due to a huge shortfall in Planning numbers.
Much as I hate internet speak, have a +1.

As a society there is an elephant in the room regarding the availability of suitable housing stock. By suitable I mean the right type of building in the right condition in the right parts of the country. Society might need it, but too many individuals and communities on an individual basis don't want it. A hell of a circle to square. Garden grabbing, as the Wail prefers it to be called, is going to be much harder in the future, too.

groak

3,254 posts

62 months

[news] 
Saturday 23rd October 2010 quote quote all
Jobbo said:
The big problem is lack of first time buyers, is it not? There's some churn in the market as people downsize but that's the only factor driving sales, as I see it.
In my corner of the woods the biggest problem is credit availability not desire.

VX Foxy

3,385 posts

126 months

[news] 
Saturday 23rd October 2010 quote quote all
Sam_68 said:
VX Foxy said:
(joking aside) What do you see as your biggest problem?
Planning.
I had a feeling you'd say that, but I'm surprised you didn't mention mortgage availability.
Round here plenty of stuff goes sstc only to remarketed a couple of weeks later - one can only presume this is either mortgage or valuation related. There are many price reductions and and loads of new instructions. Also, new development has just started to release having been on hold for a couple of years. The only supply problem seems to be credit...

Sam_68

9,939 posts

128 months

[news] 
Saturday 23rd October 2010 quote quote all
VX Foxy said:
I had a feeling you'd say that, but I'm surprised you didn't mention mortgage availability.
Nope. Mortgage availability isn't making things easy but, genuinely, by far the biggest problem and limitation on our construction numbers is the number of sales outlets (ie. active sites).

The mortgage availability problem is worst for first time buyers and for housing at that end of the market, the problem is counterbalanced to some extent by BTL... people have to live somewhere and if they can't get a mortgage to buy, they have to rent. As I said on the feedback thread, we are confident enough of sales to be able to turn away BTL investors who are asking for too much discount (for the particular case in point - the launch of a new site - because we didn't want to start eroding values by setting a precedent with low figures early on).

To give you some idea of how desperate we are with Planning, on the other hand, we recently bought an 'oven ready' site (ie. one that had detailed Planning Permission - for houses that were far from ideal in terms of marketability, it has to be said) for 7 units, just to try to fill the numbers. If you'd have asked me a year ago, I'd have told you we wouldn't be interested in anything less than 50 units and preferably we would be looking for sites of 150+.

The whole Planning system is broken, and it's about to get worse. frown

Jobbo

8,494 posts

147 months

[news] 
Saturday 23rd October 2010 quote quote all
groak said:
Jobbo said:
The big problem is lack of first time buyers, is it not? There's some churn in the market as people downsize but that's the only factor driving sales, as I see it.
In my corner of the woods the biggest problem is credit availability not desire.
That's part of it, as is the sentiment that houses are too expensive. Both interlinked, of course; if our 20-somethings could easily get credit, they'd cease to think prices were high before long because the upwards trend would no doubt carry on, supported by a new credit bubble.

NoelWatson

11,710 posts

125 months

[news] 
Saturday 23rd October 2010 quote quote all
groak said:
Jobbo said:
The big problem is lack of first time buyers, is it not? There's some churn in the market as people downsize but that's the only factor driving sales, as I see it.
In my corner of the woods the biggest problem is credit availability not desire.
That is the same for me round here for the new McLaren. Not one person I spoke to said they didn't want one. People were protesting outside the gates at Woking HQ- I think it was unfair on McLaren, surely it's the banks fault for not lending them the money?

groak

3,254 posts

62 months

[news] 
Saturday 23rd October 2010 quote quote all
NoelWatson said:
groak said:
Jobbo said:
The big problem is lack of first time buyers, is it not? There's some churn in the market as people downsize but that's the only factor driving sales, as I see it.
In my corner of the woods the biggest problem is credit availability not desire.
That is the same for me round here for the new McLaren. Not one person I spoke to said they didn't want one. People were protesting outside the gates at Woking HQ- I think it was unfair on McLaren, surely it's the banks fault for not lending them the money?
There isn't a Mclaren industry, but there is a property industry. BUT there is a motor industry, and if credit was made as unavailable for motors as it is for buy2lets it would be having the same problems as the buy2let part of the property industry is having now.

NoelWatson

11,710 posts

125 months

[news] 
Saturday 23rd October 2010 quote quote all
groak said:
NoelWatson said:
groak said:
Jobbo said:
The big problem is lack of first time buyers, is it not? There's some churn in the market as people downsize but that's the only factor driving sales, as I see it.
In my corner of the woods the biggest problem is credit availability not desire.
That is the same for me round here for the new McLaren. Not one person I spoke to said they didn't want one. People were protesting outside the gates at Woking HQ- I think it was unfair on McLaren, surely it's the banks fault for not lending them the money?
There isn't a Mclaren industry, but there is a property industry. BUT there is a motor industry, and if credit was made as unavailable for motors as it is for buy2lets it would be having the same problems as the buy2let part of the property industry is having now.
When you say unavailable, do you mean more correctly priced for risk than the crazy, Labour Winky fkwit decade we have had to endure?

Road Pest

3,107 posts

81 months

[news] 
Saturday 23rd October 2010 quote quote all
I think the lenders are deliberately over cautious currently in an attempt to avoid tougher regulation the likes of which are outlined in the mortgage review. All imo of course.

groak

3,254 posts

62 months

[news] 
Saturday 23rd October 2010 quote quote all
Lenders should lend wherever there is security and ability to repay.

tonker

46,625 posts

131 months

[news] 
Saturday 23rd October 2010 quote quote all
groak said:
Lenders should lend wherever there is security and ability to repay.
I think they mostly do. SUBJECT to goverment interference and their risk department telling them not to go overweight on certain things.

In terms of credit availability, I am extremely surprised that the developers are saying it's tight.... it's certainly not as far as I can see for people with a decent deposit, or do you mean that everyone got used to overlax lending conditions..... as a question would you say that a 90% mortgage at sub 4.5% on a newbuild estate property is uncompetitive and doesn't fairly reflect market risk ? Just because a 60% LTV buyer can get 2% ?

NoelWatson

11,710 posts

125 months

[news] 
Saturday 23rd October 2010 quote quote all
In the latest rag

"We would all love a crystal ball to see into the future. A recent survey by Savills Research come close, says Simon Ashwell of Savills Weybridge"

NoelWatson

11,710 posts

125 months

[news] 
Sunday 24th October 2010 quote quote all
Article in ST ramping/advertisement/property section about how people had done well buying at the "bottom" in 2008 and are now making money. One example was someone that bought a rundown place for £2.2m, spent £800k and it is now for sale with Savills (in an incomplete state - selling due to illness) for £3.2m. He has "made" 200k.

tonker

46,625 posts

131 months

[news] 
Sunday 24th October 2010 quote quote all
NoelWatson said:
Article in ST ramping/advertisement/property section about how people had done well buying at the "bottom" in 2008 and are now making money. One example was someone that bought a rundown place for £2.2m, spent £800k and it is now for sale with Savills (in an incomplete state - selling due to illness) for £3.2m. He has "made" 200k.
does that £800K include his £88K stamp duty bill, his £50K or so estate agent bill and the £300K of financing cost/loss of return on his money ...... ?

NoelWatson

11,710 posts

125 months

[news] 
Sunday 24th October 2010 quote quote all
tonker said:
NoelWatson said:
Article in ST ramping/advertisement/property section about how people had done well buying at the "bottom" in 2008 and are now making money. One example was someone that bought a rundown place for £2.2m, spent £800k and it is now for sale with Savills (in an incomplete state - selling due to illness) for £3.2m. He has "made" 200k.
does that £800K include his £88K stamp duty bill, his £50K or so estate agent bill and the £300K of financing cost/loss of return on his money ...... ?
Not sure, but at least it should be valued at more than £1

http://www.dailymail.co.uk/news/article-1323334/Ho...

"'We can't survive like this for ever and if it keeps going we will have to sell properties even if the market value is low.'

Leverage works both ways.
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