How far will house prices fall [volume 4]
Discussion
hyphen said:
Woman puts her house in Blackheath, London up for sale at £1.25 million. Fails to sell, so now she is attempting to raffle it off
750,000 tickets at £5 each = £3.75Million...
http://www.dailymail.co.uk/news/article-4488468/Th...
https://www.homeraffler.com
Hasn't taken it off the market yet though.
http://www.rightmove.co.uk/property-for-sale/prope...
Turns out she bought it 2 years ago under right-to-buy for £360k... Raffle stopped by the local council as possible breach of gambling commission rules.750,000 tickets at £5 each = £3.75Million...
http://www.dailymail.co.uk/news/article-4488468/Th...
https://www.homeraffler.com
Hasn't taken it off the market yet though.
http://www.rightmove.co.uk/property-for-sale/prope...
Edited by hyphen on Tuesday 9th May 19:11
http://www.telegraph.co.uk/personal-banking/mortga...
p1stonhead said:
Why does it matter how much it costs to build?
All of the costs and final values are worked out before hand and are used to get a value for the land or an offer for the land. No one buys a £10m piece of land then builds whatever fits and hope they make profit at the end.
In that case, they would not have turned a profit at all if they had built them straight away. My view is that there was a lot of competition for that piece of land and they had to pay more than they wanted to secure it. They then relied on continued market growth to be able to afford to develop the site.
edited to add: I realise that I was looking at it 'backwards', but I have to do that unless I was privy to the original negotiations. I just think that developers shouldn't be allowed to make high profits on projects without being forced to make a bigger contribution to local infrastructure etc than they currently do.
Edited by kingston12 on Friday 12th May 12:08
kingston12 said:
p1stonhead said:
Why does it matter how much it costs to build?
All of the costs and final values are worked out before hand and are used to get a value for the land or an offer for the land. No one buys a £10m piece of land then builds whatever fits and hope they make profit at the end.
In that case, they would not have turned a profit at all if they had built them straight away. My view is that there was a lot of competition for that piece of land and they had to pay more than they wanted to secure it. They then relied on continued market growth to be able to afford to develop the site.
Or it was just a bad land buyer then getting his numbers wrong. Or they bought it on risk on the basis they thought they could get planning but then couldnt. Or it took longer than anticpated - planning can take years.
Loads of different reasons but its extremely unlikely anyone professional would every just buy a piece of land for 'x' and then look to see what might work on it. Thats insane.
Our viabilities for sites are huge documents and take into account as many eventualities as physically possible to speculate on.
You start with gross development value and then work backwards taking all of your costs off including build costs, design etc etc and obviously anticipated land cost. If the numbers dont stack up at the end, you dont buy the land or negotiate a lower price.
The viabilities give differing levels of profit depending on anticipated final values but so many things can skew the final figure - something simple like interest on a loan ticking along for an extra year due to the development not selling as quickly as possible can add millions to your costs and come off profits.
Its a hugely risky business as many have said before and not at all easy.
p1stonhead said:
Its a hugely risky business as many have said before and not at all easy.
I am sure it is, and I'll have to bow to your superior knowledge of it. I am talking about one or two specific examples rather than being involved in the industry myself.I guess what I am saying is that I'd be in favour of the big developments being a bit more transparent financially. The local opinion of the two large tower block developments currently under construction in Kingston is that the developers are making a fortune whilst providing little or no improvement to infrastructure or council funding.
It would reflect better on both the council and developers if they were clearer about what was going on. I realise that the developers themselves wouldn't be too keen on doing this!
kingston12 said:
p1stonhead said:
Its a hugely risky business as many have said before and not at all easy.
I am sure it is, and I'll have to bow to your superior knowledge of it. I am talking about one or two specific examples rather than being involved in the industry myself.I guess what I am saying is that I'd be in favour of the big developments being a bit more transparent financially. The local opinion of the two large tower block developments currently under construction in Kingston is that the developers are making a fortune whilst providing little or no improvement to infrastructure or council funding.
It would reflect better on both the council and developers if they were clearer about what was going on. I realise that the developers themselves wouldn't be too keen on doing this!
p1stonhead said:
kingston12 said:
p1stonhead said:
Its a hugely risky business as many have said before and not at all easy.
I am sure it is, and I'll have to bow to your superior knowledge of it. I am talking about one or two specific examples rather than being involved in the industry myself.I guess what I am saying is that I'd be in favour of the big developments being a bit more transparent financially. The local opinion of the two large tower block developments currently under construction in Kingston is that the developers are making a fortune whilst providing little or no improvement to infrastructure or council funding.
It would reflect better on both the council and developers if they were clearer about what was going on. I realise that the developers themselves wouldn't be too keen on doing this!
kingston12 said:
p1stonhead said:
kingston12 said:
p1stonhead said:
Its a hugely risky business as many have said before and not at all easy.
I am sure it is, and I'll have to bow to your superior knowledge of it. I am talking about one or two specific examples rather than being involved in the industry myself.I guess what I am saying is that I'd be in favour of the big developments being a bit more transparent financially. The local opinion of the two large tower block developments currently under construction in Kingston is that the developers are making a fortune whilst providing little or no improvement to infrastructure or council funding.
It would reflect better on both the council and developers if they were clearer about what was going on. I realise that the developers themselves wouldn't be too keen on doing this!
p1stonhead said:
kingston12 said:
p1stonhead said:
kingston12 said:
p1stonhead said:
Its a hugely risky business as many have said before and not at all easy.
I am sure it is, and I'll have to bow to your superior knowledge of it. I am talking about one or two specific examples rather than being involved in the industry myself.I guess what I am saying is that I'd be in favour of the big developments being a bit more transparent financially. The local opinion of the two large tower block developments currently under construction in Kingston is that the developers are making a fortune whilst providing little or no improvement to infrastructure or council funding.
It would reflect better on both the council and developers if they were clearer about what was going on. I realise that the developers themselves wouldn't be too keen on doing this!
kingston12 said:
p1stonhead said:
kingston12 said:
p1stonhead said:
kingston12 said:
p1stonhead said:
Its a hugely risky business as many have said before and not at all easy.
I am sure it is, and I'll have to bow to your superior knowledge of it. I am talking about one or two specific examples rather than being involved in the industry myself.I guess what I am saying is that I'd be in favour of the big developments being a bit more transparent financially. The local opinion of the two large tower block developments currently under construction in Kingston is that the developers are making a fortune whilst providing little or no improvement to infrastructure or council funding.
It would reflect better on both the council and developers if they were clearer about what was going on. I realise that the developers themselves wouldn't be too keen on doing this!
Its always going to be about profits.
Derek Chevalier said:
It all boils down to the Government and their various attempts to keep the bubble inflated - the (big) housebuilders have just been very fortunate to have been in right place at right time, and to be fair to them, it's a very cyclical business
I'm guessing that the big house builders have some very persuasive lobbyists working for them too.p1stonhead said:
Thats fine but do you want other industries to be more highly regulated - if so which ones? limit profits on expensive cars, watches, clothes?
Its always going to be about profits.
Despite my rather left wing ranting on this thread, I am usually in favour of less regulation rather than more!Its always going to be about profits.
Ideally, there wouldn't be any regulation of property development either. We are, as you correctly say, talking about private companies trying to make a profit.
I just think that in large, negatively perceived, town centre developments like the ones we are discussing, it might be a good idea if the council and the developer were made to explain a bit more more about what they are doing.
The perception is that several thousand extra people are being moved into Kingston and that this will make life more difficult for existing residents as there appear to be no plans for any new transport infrastructure, schools, health facilities etc and that a property developer is running away with bags of cash.
In reality this is probably not the case at all, although the extra people with no facilities do seem bound to cause a problem.
anonymous said:
[redacted]
It's crazy around there now, isn't it?I don't ever really go to that part of town, but pass it on the train most days. It looked really positive when the first few blocks went up as it improved what was a fairly awful area, but it is far too dense now and they are still building.
I certainly wouldn't fancy living there even if I could afford it.
Battersea Station is ging to be big profits. OH dragged me to an open day there a month ago as they were putting on entertainment for the kids, free artisan cakes and poncy coffee.
They kept asking everyone to make sure they post on their instagrams, I don't have instagram but if it means free cake I was happy to nod implying I would
They kept asking everyone to make sure they post on their instagrams, I don't have instagram but if it means free cake I was happy to nod implying I would
hyphen said:
Battersea Station is ging to be big profits. OH dragged me to an open day there a month ago as they were putting on entertainment for the kids, free artisan cakes and poncy coffee.
They kept asking everyone to make sure they post on their instagrams, I don't have instagram but if it means free cake I was happy to nod implying I would
They have just downgraded their returns forecast to 8% IRR. i would expect this to get lower as time goes on and the market softens more. They kept asking everyone to make sure they post on their instagrams, I don't have instagram but if it means free cake I was happy to nod implying I would
that is not big profits. if they break even i would be surprised.
kingston12 said:
It's crazy around there now, isn't it?
I don't ever really go to that part of town, but pass it on the train most days. It looked really positive when the first few blocks went up as it improved what was a fairly awful area, but it is far too dense now and they are still building.
I certainly wouldn't fancy living there even if I could afford it.
You think it's dense now!?!I don't ever really go to that part of town, but pass it on the train most days. It looked really positive when the first few blocks went up as it improved what was a fairly awful area, but it is far too dense now and they are still building.
I certainly wouldn't fancy living there even if I could afford it.
Just wait until the 50+ storey Wanda, CLS (ex) and St Modwen towers start going up and are fully massed.
anonymous said:
[redacted]
As soon as I read it involved changing affordable housing requirements it rang an alarm bell, There was one in kingston where the same developer had sign off on two plots, based on both sites hosting affordable housing.During development they persuaded the council with a sob story and so the more lucrative site ended up with 0 affordable housing, and the other site had it increased!
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