How far will house prices fall [volume 5]
Discussion
fishseller said:
Driving along the A13 Ripple road towards a A406 then A12 towards black wall tunnel all I see are 10's of thousand of new builds flats in tower blocks who are buying these overpriced boxes with crippling service charges ? I have never seen such a boom in flat building in my life It don't look like there is a housing shortage
The housing shortage is all part of the game by the government to allow developers to build all of these flats. If anyone dares to oppose, they are described as being ‘NIMBYs’ and accused of ‘not knowing that we need all of these new homes’.It is strange that there seems to be enough short term demand for them. In the longer term, I’d expect a lot of them to turn into social housing, so they will fulfil the correct need eventually, but could have been built more cheaply and efficiently.
kingston12 said:
fishseller said:
Driving along the A13 Ripple road towards a A406 then A12 towards black wall tunnel all I see are 10's of thousand of new builds flats in tower blocks who are buying these overpriced boxes with crippling service charges ? I have never seen such a boom in flat building in my life It don't look like there is a housing shortage
The housing shortage is all part of the game by the government to allow developers to build all of these flats. If anyone dares to oppose, they are described as being ‘NIMBYs’ and accused of ‘not knowing that we need all of these new homes’.It is strange that there seems to be enough short term demand for them. In the longer term, I’d expect a lot of them to turn into social housing, so they will fulfil the correct need eventually, but could have been built more cheaply and efficiently.
fishseller said:
kingston12 said:
fishseller said:
Driving along the A13 Ripple road towards a A406 then A12 towards black wall tunnel all I see are 10's of thousand of new builds flats in tower blocks who are buying these overpriced boxes with crippling service charges ? I have never seen such a boom in flat building in my life It don't look like there is a housing shortage
The housing shortage is all part of the game by the government to allow developers to build all of these flats. If anyone dares to oppose, they are described as being ‘NIMBYs’ and accused of ‘not knowing that we need all of these new homes’.It is strange that there seems to be enough short term demand for them. In the longer term, I’d expect a lot of them to turn into social housing, so they will fulfil the correct need eventually, but could have been built more cheaply and efficiently.
ben5575 said:
fishseller said:
kingston12 said:
fishseller said:
Driving along the A13 Ripple road towards a A406 then A12 towards black wall tunnel all I see are 10's of thousand of new builds flats in tower blocks who are buying these overpriced boxes with crippling service charges ? I have never seen such a boom in flat building in my life It don't look like there is a housing shortage
The housing shortage is all part of the game by the government to allow developers to build all of these flats. If anyone dares to oppose, they are described as being ‘NIMBYs’ and accused of ‘not knowing that we need all of these new homes’.It is strange that there seems to be enough short term demand for them. In the longer term, I’d expect a lot of them to turn into social housing, so they will fulfil the correct need eventually, but could have been built more cheaply and efficiently.
MX-6 said:
ben5575 said:
Or back in the real world, they'll primarily be BTR blocks.
What's BTR?A normal block of flats will generally just be that, owned by a mix owner occupiers and private landlords. Private landlords can (generalisation) be a pita for tenants; short tendencies, taking time to repair things, nicking deposits etc etc.
BTR blocks are owned entirely by institutional investors, managed by professional operators and offer long leases, prompt repairs and potentially lots of additional stuff such as lounges, work space, dining rooms, gyms etc etc which are all wrapped up in the (premium) rent.
A different product for the market and a new commodity class for the big funds to invest in since retail and now offices are going tits up.
ben5575 said:
MX-6 said:
ben5575 said:
Or back in the real world, they'll primarily be BTR blocks.
What's BTR?A normal block of flats will generally just be that, owned by a mix owner occupiers and private landlords. Private landlords can (generalisation) be a pita for tenants; short tendencies, taking time to repair things, nicking deposits etc etc.
BTR blocks are owned entirely by institutional investors, managed by professional operators and offer long leases, prompt repairs and potentially lots of additional stuff such as lounges, work space, dining rooms, gyms etc etc which are all wrapped up in the (premium) rent.
A different product for the market and a new commodity class for the big funds to invest in since retail and now offices are going tits up.
fishseller said:
very informative didn't know that , so these companies that offer investments solely for property funds buy these up ?
No. Traditional blocks of flats don't tend to work very well for BTR. They are simply a series of flats connected by corridors with very little additional amenity/facilities space (as it costs money to build for no return - better to put a flat in it instead).BTR blocks are purpose built and designed. So for example, a typical 2b unit will have two equal sized bedrooms so that two friends can share without arguing over who gets the biggest room. The additional amenity space needs to be designed in as well. The large communal space allows for smaller more efficient apartment sizes (like in a hotel to make an extreme example).
That communal space works as it is actively managed by the Operator who apart from the physical offering will tackle the softer side of things; events, bookings, concierge etc. Something you don't get in traditional apartment blocks
From a commercial perspective it is about providing somewhere to live that is social and has a community so that, crudely. people will want to live there longer and pay a premium for doing so. A nice stable rental income with minimal churn and voids.
There are loads out there, but an example here: https://modaliving.com/
ben5575 said:
No. Traditional blocks of flats don't tend to work very well for BTR. They are simply a series of flats connected by corridors with very little additional amenity/facilities space (as it costs money to build for no return - better to put a flat in it instead).
From a commercial perspective it is about providing somewhere to live that is social and has a community so that, crudely. people will want to live there longer and pay a premium for doing so. A nice stable rental income with minimal churn and voids.
We used to get pitched to invest in these gimmicky schemes a lot and I never saw the evidence to suggest that this premium, if it exists, is large enough to cover the extra build and operating cost. From a commercial perspective it is about providing somewhere to live that is social and has a community so that, crudely. people will want to live there longer and pay a premium for doing so. A nice stable rental income with minimal churn and voids.
The German platforms are the best institutional PRS players in the world and they mostly don't bother with it.
ben5575 said:
fishseller said:
very informative didn't know that , so these companies that offer investments solely for property funds buy these up ?
No. Traditional blocks of flats don't tend to work very well for BTR. They are simply a series of flats connected by corridors with very little additional amenity/facilities space (as it costs money to build for no return - better to put a flat in it instead).BTR blocks are purpose built and designed. So for example, a typical 2b unit will have two equal sized bedrooms so that two friends can share without arguing over who gets the biggest room. The additional amenity space needs to be designed in as well. The large communal space allows for smaller more efficient apartment sizes (like in a hotel to make an extreme example).
That communal space works as it is actively managed by the Operator who apart from the physical offering will tackle the softer side of things; events, bookings, concierge etc. Something you don't get in traditional apartment blocks
From a commercial perspective it is about providing somewhere to live that is social and has a community so that, crudely. people will want to live there longer and pay a premium for doing so. A nice stable rental income with minimal churn and voids.
There are loads out there, but an example here: https://modaliving.com/
fishseller said:
ben5575 said:
fishseller said:
very informative didn't know that , so these companies that offer investments solely for property funds buy these up ?
No. Traditional blocks of flats don't tend to work very well for BTR. They are simply a series of flats connected by corridors with very little additional amenity/facilities space (as it costs money to build for no return - better to put a flat in it instead).BTR blocks are purpose built and designed. So for example, a typical 2b unit will have two equal sized bedrooms so that two friends can share without arguing over who gets the biggest room. The additional amenity space needs to be designed in as well. The large communal space allows for smaller more efficient apartment sizes (like in a hotel to make an extreme example).
That communal space works as it is actively managed by the Operator who apart from the physical offering will tackle the softer side of things; events, bookings, concierge etc. Something you don't get in traditional apartment blocks
From a commercial perspective it is about providing somewhere to live that is social and has a community so that, crudely. people will want to live there longer and pay a premium for doing so. A nice stable rental income with minimal churn and voids.
There are loads out there, but an example here: https://modaliving.com/
It's like student living on a grander scale. Communal living doesn't appeal to me, but then I doubt I'm their market.
The ones I've seen around London (which always try to give the impression they're central but they're based in Wembley or similar) are 'housing as a service'. Rent, all bills etc. included, furniture provided, all in one charge so no worry about getting connected to the internet, changing details etc. or buying furniture. Quite attractive for a young person straight out of university perhaps - if the location is right.
Couple of hassle free years aged 21 -23, then move on to your own place.
The ones I've seen around London (which always try to give the impression they're central but they're based in Wembley or similar) are 'housing as a service'. Rent, all bills etc. included, furniture provided, all in one charge so no worry about getting connected to the internet, changing details etc. or buying furniture. Quite attractive for a young person straight out of university perhaps - if the location is right.
Couple of hassle free years aged 21 -23, then move on to your own place.
I agree and with Nick as well. We build smaller schemes of around 100 units in secondary locations pitched at mid market rent with fewer bells and whistles.
There's definitely a place for amenity space as those who have been trapped in their apartments through lockdown will attest to. Along with longer leases and decent, attentive management.
However as you suggest, the bells and whistles will look less appealing when you're looking to save money as people will be in the very near future.
There's definitely a place for amenity space as those who have been trapped in their apartments through lockdown will attest to. Along with longer leases and decent, attentive management.
However as you suggest, the bells and whistles will look less appealing when you're looking to save money as people will be in the very near future.
number2 said:
It's like student living on a grander scale. Communal living doesn't appeal to me, but then I doubt I'm their market.
The ones I've seen around London (which always try to give the impression they're central but they're based in Wembley or similar) are 'housing as a service'. Rent, all bills etc. included, furniture provided, all in one charge so no worry about getting connected to the internet, changing details etc. or buying furniture. Quite attractive for a young person straight out of university perhaps - if the location is right.
Couple of hassle free years aged 21 -23, then move on to your own place.
Exactly right. Instagramable as well.The ones I've seen around London (which always try to give the impression they're central but they're based in Wembley or similar) are 'housing as a service'. Rent, all bills etc. included, furniture provided, all in one charge so no worry about getting connected to the internet, changing details etc. or buying furniture. Quite attractive for a young person straight out of university perhaps - if the location is right.
Couple of hassle free years aged 21 -23, then move on to your own place.
Many younger colleagues bought these, with also the help of first time buying. Same with the shared-ownership, quite easy way as jumping into ladder. Not have to deal with daily struggles of having an old house is important imho in the first years of your career, to focus on the job without distractions.
So a property has come up that’s in budget and meets our needs for a first house.
Viewed it last night and it seems nice enough, the bathroom is a bodge job though and would be ripped out and changed even though it’s under 2 years old.
Seller doesn’t have and isn’t wanting to get a home report though. Which has me concerned.
Zoopla, which isn’t hugely accurate but I use as a ball park figure has the house valued at 7 grand under his asking price.
Which is bang on Zoopla’s upper range.
Emma wants to go for it but my gut feeling isn’t sitting right on it.
Thoughts?
Viewed it last night and it seems nice enough, the bathroom is a bodge job though and would be ripped out and changed even though it’s under 2 years old.
Seller doesn’t have and isn’t wanting to get a home report though. Which has me concerned.
Zoopla, which isn’t hugely accurate but I use as a ball park figure has the house valued at 7 grand under his asking price.
Which is bang on Zoopla’s upper range.
Emma wants to go for it but my gut feeling isn’t sitting right on it.
Thoughts?
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