Private Rents in England "Unaffordable"

Cleaver

Jimmy_31 wrote: »

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.

Places like Barrett are sitting on unsold stock an losing money hand over fist. Their share price from Jan 2007 to now is below, and it shows that they've lost 93% of their value. The company is scr*wed.

If you're correct, companies like Barrett have build homes for a certain price and are now trying to sell them for way above what they cost in total to bring to market (double? treble?). This can't be true, as it doesn't make economic sence. If it were true Barrett would simple reduce their profit margin from 50% (or whatever you think it is) to 20% and slash the price of their homes, getting them sold quickly and make a profit again. Wouldn't they? Logic tels you that their houses must have cost quite close to what they are selling them for, hence why they can't afford to cut asking prices by much.

Jimmy_31

Cleaver wrote: »

Places like Barrett are sitting on unsold stock an losing money hand over fist. Their share price from Jan 2007 to now is below, and it shows that they've lost 93% of their value. The company is scr*wed.

If you're correct, companies like Barrett have build homes for a certain price and are now trying to sell them for way above what they cost in total to bring to market (double? treble?). This can't be true, as it doesn't make economic sence. If it were true Barrett would simple reduce their profit margin from 50% (or whatever you think it is) to 20% and slash the price of their homes, getting them sold quickly and make a profit again. Wouldn't they? Logic tels you that their houses must have cost quite close to what they are selling them for, hence why they can't afford to cut asking prices by much.

Do you really think a 2 bed mid terrace new build cost over 100k to bring to market.

Joe_Bloggs

The price of a brick can range from 20p to 50p each per 1000 delivered. The brick cost is irrelevant in a property. Is the land and planning permission the key to the expense of property?

Does anybody recollect any prominent self build community efforts from the past?
J_B.

PasturesNew

On modern estates, the cost of a house also includes all those "affordable housing" houses, which are bigger/better spec than the open market ones. So you're not just paying for the cost of the house you want to buy.

Cleaver

Jimmy_31 wrote: »

Do you really think a 2 bed mid terrace new build cost over 100k to bring to market.

Huh? I have absolutely no idea what a new build house costs to bring to market as there are so many variables. I presume in some places it could be £300,000 plus, in others it'll be £50,000. What does the specific price have to do with the concept we're talking about?

crash123

Cleaver wrote: »

Huh? I have absolutely no idea what a new build house costs to bring to market as there are so many variables. I presume in some places it could be £300,000 plus, in others it'll be £50,000. What does the specific price have to do with the concept we're talking about?

What he is saying is that materials cost the same wherever you are in the UK. Also that big companies have screwed the workers pay down.

Jimmy_31

Cleaver wrote: »

Huh? I have absolutely no idea what a new build house costs to bring to market as there are so many variables. I presume in some places it could be £300,000 plus, in others it'll be £50,000. What does the specific price have to do with the concept we're talking about?

Im not talking about a concept, im saying massive house building companys are charging way over the odds for the houses they build.

nearlynew

If building firms can't build at the moment because they can't sell their houses, fine.

They can stop building, go bust, release their landbanks and let someone step in that can build and sell at a price which is affordable.

Problem solved and no need for any financial wizardry or loose lending to fund the sale of an overpriced house.

geneer

robmatic wrote: »

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.

I would suggest that people not having children because they cannot afford to do so is not a good thing. I would say the removal of a safety net for sickness and unemployment and raising children is not a good thing.

You imply that debt has increased because of social change.
I believe that in reality social change is also very much a function of increased debt.

A better level must be found. And clearly this is happening, regardless of complaints on internet forums. The realities of the world take precedence.

I'd also note that your theory appears to ignore that fact that interest rates can and will change. I'm willing to bet that once the current economic emergency reduces, average interest rates will be significantly higher than the last decade. The age of free money is coming to an end. As will any theories about families popping out to by another house on a regular basis.

geneer

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?

As you bought months before peak probably not.

Rebuild cost likely reflects outdated construction materials and techniques.

What it does mean is that you are paying a far higher insurance premium that you would be paying for an equivalent size building using more modern construction techniques. Sorry to break it to you.

But as always, thanks for sharing intimate details of your personal wealth with the forum.