Private Rents in England "Unaffordable"

robmatic

geneer wrote: »

In relation to single incomes what you're implying is that if house prices were previously 4x a single salary (on single income), its now ok for them to be 8x a single salary (double income). This reasoning doesn't appear to be all that credible.

Denying that there hasn't been a fair amount of social change over the last few decades doesn't appear to be all that credible either. For a start, gender roles have become less clearly defined in the workplace and more couples are choosing not to have children or cannot do so. On what rationale should a gay couple be restricted to a mortgage of 3.5 times single income?

Imagine what would happen to the distribution of property ownership if house prices remained fixed at 4 x average income... a couple with 2 average incomes who saved 20% of their combined income would be able to buy an additional average family property with cash every 10 years.

Jimmy_31

Cleaver wrote: »

Two points on this.

1. On a new build the build price is just one component that makes up the total cost to bring a place to market.
2. I don't know anyone who puts two prices on a product, in terms of the sale price and the price it cost to make and bring to market. For obvious reasons.

Two points on this.

1. new build prices are way way way over what they cost to bring to market.

2. i dont think i need to respond to your 2nd point.

Graham_Devon

Cleaver wrote: »

2. I don't know anyone who puts two prices on a product, in terms of the sale price and the price it cost to make and bring to market. For obvious reasons.

Many many do that all the time.

Fuel.
Consumer Energy.
Water.

It's a consistent gripe.

Jimmy_31

HAMISH_MCTAVISH wrote: »

Seeing as the insurance replacement value to rebuild my 100 year old house is around £100,000 more than the house and land together are worth, does this mean it's a bargain and I should buy some more?

So you went the self build route, fair play mate its hard graft building houses.

Cleaver

Graham_Devon wrote: »

Many many do that all the time.

Fuel.
Consumer Energy.
Water.

It's a consistent gripe.

You don't get told the actual cost of these products, you get told how much it cost the company to buy the raw materials.

Cleaver

Jimmy_31 wrote: »

Two points on this.

1. new build prices are way way way over what they cost to bring to market.

They're priced at market price or a price that makes the company profit. Let's say a company finds a way to build a house for £60,000 all in. That includes everything: the build cost, land, materials, advertising, the cost for head office, sales and marketing, pensions for staff etc. etc. If similar houses in the area are selling for £150,000 then the company have brilliant opportunity to undercut the market and sell for £100,000. That's still a massive profit. The fact that lots of Barrett et. al's homes are not selling at the moment suggests that there isn't the wiggle room for them to reduce the price much more, hence they musn't be working in massive profit margins to begin with.

Joe_Bloggs

I am astonished at the continued high quality of the debate amongst the participants. It was worth the thought provoking read.
J_B.

ukcarper

Cleaver wrote: »

They're priced at market price or a price that makes the company profit. Let's say a company finds a way to build a house for £60,000 all in. That includes everything: the build cost, land, materials, advertising, the cost for head office, sales and marketing, pensions for staff etc. etc. If similar houses in the area are selling for £150,000 then the company have brilliant opportunity to undercut the market and sell for £100,000. That's still a massive profit. The fact that lots of Barrett et. al's homes are not selling at the moment suggests that there isn't the wiggle room for them to reduce the price much more, hence they musn't be working in massive profit margins to begin with.

Or it could be that the biggest cost is the Land

Cleaver

ukcarper wrote: »

Or it could be that the biggest cost is the Land

It doesn't really matter what makes up the cost. I'm just saying that if places like Barrett had a 50% profit margin then they would happily reduce their unsold stock by 30% tomorrow and start making profit from turnover. The fact that they don't do this shows that the total cost of new builds can't be that much below what they're on the market for.

Jimmy_31

Cleaver wrote: »

They're priced at market price or a price that makes the company profit. Let's say a company finds a way to build a house for £60,000 all in. That includes everything: the build cost, land, materials, advertising, the cost for head office, sales and marketing, pensions for staff etc. etc. If similar houses in the area are selling for £150,000 then the company have brilliant opportunity to undercut the market and sell for £100,000. That's still a massive profit. The fact that lots of Barrett et. al's homes are not selling at the moment suggests that there isn't the wiggle room for them to reduce the price much more, hence they musn't be working in massive profit margins to begin with.

Wages have tanked throughout the construction industry and bricks did not quadruple in price, but massive house building company are still charging top whack for a laughable house.

new builds cost very little to throw up compared to the profit that is made.

Its just a made up number.

Its nice of the government to use massive house building companys to provide the homes for the latest bull5hit FTB scheme isnt it.