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Debate House Prices
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A bit of good news..?
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you could say the same with building houses
i.e. they can only fall so far due to cost to build
It's not true. No more houses will be built if cost of building < sale price. The existing houses have already been built however and will ultimately be sold for the maximum price that can be realised. What they cost to build has already been spent and is immaterial.0 -
If people have more to spend it will create jobs that is how it works (not instantly).
The less you have to spend contraction, the more expansion.
Only if you spend it, rather than hoard it, or use it to pay off existing debts.
Given the state of the economy, I for one would probably do that rather than spend it, if my costs on essentials reduced.0 -
you could say the same with building houses
i.e. they can only fall so far due to cost to build
I don't think you can build a house for much less than £60k, possibly slightly more - and that would be a 2 bed terraced house as part of a development. One of the big problems in the UK is the cost and availability of land.US housing: it's not a bubble
Moneyweek, December 20050 -
It's not true. No more houses will be built if cost of building < sale price.
couldn't you say the same about oil though
i.e. if their not making any money on it why sell it?The existing houses have already been built however and will ultimately be sold for the maximum price that can be realised. What they cost to build has already been spent and is immaterial.
i agree kind of........................i think its a bit more complicated than that though0 -
you could say the same with building houses
i.e. they can only fall so far due to cost to build
That's new builds. The vast majority of stock out there has already been bought/sold at least once. It can go for whatever the seller decides (or has) to accept for it so it's not subject to cost to build.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
That's new builds. The vast majority of stock out there has already been bought/sold at least once. It can go for whatever the seller decides (or has) to accept for it so it's not subject to cost to build.
again i agree..................i just think its more complicated than that
i think the above is fine as long as know one ever wants to have any work done to their houses, new kitchens, extensions etc, the population is declining etc etc0 -
kennyboy66 wrote: »I don't think you can build a house for much less than £60k, possibly slightly more - and that would be a 2 bed terraced house as part of a development. One of the big problems in the UK is the cost and availability of land.
Land prices will almost certainly drop. Salaries of your builders and tradesmen will certainly drop (plenty of them going to be looking for work). Cost of materials, probably lower as well.
Plus lots of big builders sit on land banks for years, so even at the peak of the boom they might be building on land that had cost much less than current market value.
If we assume that you will be able to build an FTB home (2 bed on an estate) for 50k in the recession, then 60k for an FTB place still allows you to make a nice profit.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
again i agree..................i just think its more complicated than that
i think the above is fine as long as know one ever wants to have any work done to their houses, new kitchens, extensions etc, the population is declining etc etc
Maybe they could just, you know, save up for home improvements?
The concept of saving for what you want isn't so popular nowadays but I have the feeling that it is about to be back in fashion quite soon.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
Only if you spend it, rather than hoard it, or use it to pay off existing debts.
Given the state of the economy, I for one would probably do that rather than spend it, if my costs on essentials reduced.
But you can't base the UK economy on what you do.
I am just saying how the economy works in general.
What happened the last 10 years and what is happening now is a prime example is it not?0
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