A bit of good news..?

adr0ck

!!!!!!? wrote: »

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.

i agree with the 60K build cost for a house (government studies etc etc)

so i will agree with £50k in recession

however these costs do not include

land prices
interest charges (at least 4% over base at mo.....over say 9 months)
services (eg water connection £1k, elec £1k, gas £1k, bt £250 etc, streetlights £250)
road costs
open space proviosn costs (average say £1k per plot)
affordable housing provision costs (average 30% of site say £10k)
professional fees (£500 architect, £250 engineer, £250 survey and geotechnics etc)
NHBC £1k
fees for road bond etc

Chris2685

Don't forget the millions of people who are employed due to the price of oil... Millions of people are paid from the revenue of oil.

WTF?_2

Chris2685 wrote: »

Don't forget the millions of people who are employed due to the price of oil... Millions of people are paid from the revenue of oil.

Hmm, that reminds me. I wonder how mitchaa is doing, up there in Aberdeen?

Slumping revenue for oil isn't going to do much for the economy and house prices in that area especially now that prices in Scotland generally have turned out to be not immune to the slide.

Realy

!!!!!!? wrote: »

1)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.

2)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.

3)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.

1) Will they though as some will retrain and most polish bricky gangs have moved on. You can't count on lower wages. And material costs are not likely to go below 06 costs. (Builders have already wrote down land values)

2) does not mean they have to build on it though untill things pick up

3) You can't assume it 50K to build a semi including land costs etc.
On top of building you have marketing, snagging, sales, admin etc. 16% or £10k may well be insufficient to cover those costs.

Cannon_Fodder

!!!!!!? wrote: »

Hmm, that reminds me. I wonder how mitchaa is doing, up there in Aberdeen?

Slumping revenue for oil isn't going to do much for the economy and house prices in that area especially now that prices in Scotland generally have turned out to be not immune to the slide.

It does seem that Scotland's special status, of having immunity to normal economic factors, has been waived (at last)...:rolleyes:

http://newsvote.bbc.co.uk/1/hi/scotland/7672431.stm

kennyboy66_2

I have never seen much evidence to suggest that wage rates actually fall in a recession.

boyse7en

I'd have thought that wages would go up in a recession. Look at how the Union for public-sector workers are striking against pay increases of 2%, as they are below inflation.
If inflation holds at around 4-5%, any Union is going to be asking for at least a similar increase, and you'll get a trickle-down into the private sector too.

Cannon_Fodder

I would have agreed with boyse7en, until the news yesterday;

http://www.channel4.com/news/articles/business_money/police+agree+threeyear+pay+deal/2538932

At 2.6% average for 3 years, the Police let the Govt off lightly...and the Govt will hold that example up to the rest of the Public Sector, as unfair to the Police if other groups wish to pursue more...

Realy

Cannon_Fodder wrote: »

I would have agreed with boyse7en, until the news yesterday;

http://www.channel4.com/news/articles/business_money/police+agree+threeyear+pay+deal/2538932

At 2.6% average for 3 years, the Police let the Govt off lightly...and the Govt will hold that example up to the rest of the Public Sector, as unfair to the Police if other groups wish to pursue more...

I think this year it is bad new for them but inflation is predicted by some to be well below 2% this time next year. So in the long run they have more the likely got a good deal.

But any wage increase is not a drop, they may be slightly worse off based on inflation but if you factored wage inflation in to the cost of building somthing it would not make it cheaper.

pickles110564

Realy wrote: »

I think this year it is bad new for them but inflation is predicted by some to be well below 2% this time next year. So in the long run they have more the likely got a good deal.

But any wage increase is not a drop, they may be slightly worse off based on inflation but if you factored wage inflation in to the cost of building somthing it would not make it cheaper.

Not a chance they have tried to keep it at 2% and failed miserabley, inflation will hit 6.5% by Jan, unemployment will hit 3.5 Million, interest rate will hit 3.5% but this will still not be passed on to mortgage holders.
Nothing good coming up for ages but hopefully Ipswich will have sacked the tinkerman by Christmas.