How far will house prices fall? [Volume 3]
Discussion
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...)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 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.
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.
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.
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.
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.
Sam_68 said:
VX Foxy said:
(joking aside) What do you see as your biggest problem?
Planning.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...
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.
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.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.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.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.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.
anonymous said:
[redacted]
Not sure, but at least it should be valued at more than £1http://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.
In terms of credit for businesses (SMEs) and private mortgages, this is the position for most of the UK:
Rightly or wrongly the global players who we like to think of as 'our' high street banks - the one's most business and private customers turn to by default - have decided to gather up their capital and go and play with someone else. The UK is out of favour.
It seems many pundits have yet to learn one lesson here; QE is not filtering into the UK economy. It's helping the banks, but it's not in any way encouraging them to take any more risk in the UK.
Rightly or wrongly the global players who we like to think of as 'our' high street banks - the one's most business and private customers turn to by default - have decided to gather up their capital and go and play with someone else. The UK is out of favour.
It seems many pundits have yet to learn one lesson here; QE is not filtering into the UK economy. It's helping the banks, but it's not in any way encouraging them to take any more risk in the UK.
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