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Debate House Prices
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Newsnight... The shortage in housing
Comments
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grizzly1911 wrote: »The fact they overpaid for land is surely a commercial decision they made. They have planning permission for it. Had we not had the fiancial crisis they would have built out on sold on and pocketed the profit.
Absolutely. But we did have a financial crisis and we are where we are. A rationally run business would simply accept the loss, build houses on the land, sell them and move on. That is certainly what an unlisted company would do. However directors of listed companies act in their own self interests (and in the knowledge that shareholders are short termist and also irrational) so sit on the land as it means healthier accounts in the short term albeit at the expense of cash flow and therefore growth. According to my friend (who is even more of an idiot than me, so may be talking total rubbish) it is a huge factor in depressing the rate of housebuilding.0 -
chewmylegoff wrote: »I know someone who is FC at a major national house builder listed on LSE. At the moment the single biggest issue for them is that they bought loads of land which has planning permission in place during the lead up to the financial crisis.
Because the land that you could get pp on was in short supply they overpaid for it at the time. Now it is worth less but is still sitting I their balance sheet at cost.
If they build on it and sell the houses they will realise an accounting loss as a result.
That means they will then have to impair all their other land bought at the same time. Big loss crystallised. No directors bonuses.
Furthermore their shareholders will flip out and the directors will get forced out.
Result = don't build on that land.
Would they stop building too?
Theres a bit of an argument here (from people who have bought new builds, only to be left on a building site for years to come) as the builders have pulled out of building on zones 2 & 3. All zones have planning permission, and are now "for future development".
However, the people buying in to the first phase (zone 1) believed there would be a school, library, recreation areas etc, all of which now, are just planned for sometime in the future, and even phase 1 hasn't been completed. This is where the argument comes, as it's one of the main reasons the whole, long process was passed.
The builders say they can't sell the houses, but there are no houses to sell...all that were built are now sold...left in something which really does look half finished. Not sure what the council can do about it, but it seems the council just blame the builders, and in the meantime, everythign promised is now "for the future". Seems the builders can do as they like, keep the land, and they may well start building later. Though I'm just a bystander.0 -
I've read about this sort of thing as well. This is where we actually need legislation that if developers are not developing land then they forfeit it to the council.
Out of curiosity, aren't they forced to mark to market the land banks they are sitting on and take the losses?
i hear that at one point in Singapore a cartel of landlords were forcing up rents. The ruling party (the People's Action Party) under Lee Kuan Yew had an arch-capitalist ideology.
That didn't stop them from nationalising the housing stock and releasing it to the public in a controlled and rational way.There is no honour to be had in not knowing a thing that can be known - Danny Baker0 -
There's any amount of empty houses up north0
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There's any amount of empty houses up north
Shame there is not enough well paid work."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Shame there is not enough well paid work.
true, but that wouldn't be a problem for the unemployed on housing benefit0 -
true, but that wouldn't be a problem for the unemployed on housing benefit
What is to say they won't find work or that the next incumbent won't also end up in the same position?
Why should the north be the dumping ground for a nations problem?
Proportionally tax payers in the north pay just as much as those in the south arguably more as regressive taxes hit harder.
There is another solution but we are not allowed to discuss it."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »What is to say they won't find work or that the next incumbent won't also end up in the same position?
Why should the north be the dumping ground for a nations problem?
equally if there was more people, more employers might come up north.
The south east is over crowded & growing
the north east's population is dwindling0 -
equally if there was more people, more employers might come up north.
The south east is over crowded & growing
the north east's population is dwindling
I doubt it without government persuasion and inducement.
The government isn't really that interested in the north. Maybe fracking may offer some limited hope."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
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