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Debate House Prices
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Developers Pushing Help to Buy Big Time
thescouselander
Posts: 5,547 Forumite
I went and had a look round a new development yesterday just to have a nosy and I was fairly horrified by some of the sales techniques.
Basically there was a big push on help to buy and two prices featured on the price list - the "market value" in normal font and in bold red font the "price after help to buy". The suggestion was very much that the price you pay is 20% lower than it actually is as the help to buy loan miraculously disappears from any consideration.
There was also a big push from the sales rep to consider a bigger house than we could afford on the basis of getting a 20% boost from the government.
I can see how people could get sucked into all of this - surely this has to be building up trouble.
Basically there was a big push on help to buy and two prices featured on the price list - the "market value" in normal font and in bold red font the "price after help to buy". The suggestion was very much that the price you pay is 20% lower than it actually is as the help to buy loan miraculously disappears from any consideration.
There was also a big push from the sales rep to consider a bigger house than we could afford on the basis of getting a 20% boost from the government.
I can see how people could get sucked into all of this - surely this has to be building up trouble.
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Comments
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thescouselander wrote: »surely this has to be building up trouble.
Well it's certainly getting more houses built.
New build starts up quite dramatically year on year already, with more forecast to come online.
http://www.ft.com/cms/s/0/e1184146-cdd6-11e2-8313-00144feab7de.html#axzz2ViIGSvf8Mark Clare, chief executive of Barratt, one of the biggest housebuilders, said completions of new homes would rise 20 per cent compared with two years ago.
“Our production will rise to meet higher levels of demand. We are investing in land and bringing it through planning too,” he said.
You can't fix a housing shortage by preventing over a million people from buying through mortgage rationing.
All that happens is rents soar to record highs instead, as we have seen, while the housing shortage worsens.
This scheme is finally one which is working in partially repairing the dysfunctional lending markets, it's getting more houses built, and enabling more people to buy.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Well it's certainly getting more houses built.
New build starts up quite dramatically year on year.
The same effect could be achieved for nothing by putting a time limit on planning permission issued on landbanks. Round by us developers only release a few plots at a time to inflate prices - this practice needs to be dealt with.0 -
thescouselander wrote: »The same effect could be achieved for nothing by putting a time limit on planning permission issued on landbanks. Round by us developers only release a few plots at a time to inflate prices - this practice needs to be dealt with.
Builders won't build what they can't sell.
If there are no mortgages to be had, then it makes no difference what time limits you put on planning permission, they still won't get built.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Builders won't build what they can't sell.
If there are no mortgages to be had, then it makes no difference what time limits you put on planning permission, they still won't get built.
There is no problem with mortgage supply for sensible sums of money. If houses were more realistically priced there would be loads of mortgages being issued.0 -
HAMISH_MCTAVISH wrote: »
New build starts up quite dramatically year on year already, with more forecast to come online.
It's only "dramatic" because of the "dramatic" way the construction sector fell off a cliff and stopped building.
I don't really view progress towards "normal" activity levels dramatic.0 -
thescouselander wrote: »There is no problem with mortgage supply for sensible sums of money.
That is simply not true.
There will not be any more money available if prices drop.
And while you could make the same amount of money stretch between 10% or 20% more houses if prices fell by 10% or 20%, that doesn't come close to building the 300% more houses every year we need to keep up, let alone catch up on the million houses shortage that already exists.
Which is of course why prices are high to begin with.If houses were more realistically prices there would be loads of mortgages being issued.
Prices are high because of the housing shortage. Falling prices will not result in any more money being available for lending.
And builders can't cut massively because they'd then be losing money. Most large builders annual profits are in single digit percentages. They don't have a lot of room to play with before losing money as it is.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
It's only "dramatic" because of the "dramatic" way the construction sector fell off a cliff and stopped building.
I don't really view progress towards "normal" activity levels dramatic.
We need to build around 3 times as many houses as we do.
The main reason we aren't building them is because of the dysfunctional lending system, and mortgage rationing.
The only way to get anything like enough houses built is to massively increase lending.
This is but a small step in the right direction, but at least it's working better than previous attempts.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »...The only way to get anything like enough houses built is to massively increase lending.
that's just stupidly wrong, as a matter of fact.
say, if you must, something like, 'in my view by a distance the best way to get enough houses built is...', but....FACT.0 -
thescouselander wrote: »The same effect could be achieved for nothing by putting a time limit on planning permission issued on landbanks. Round by us developers only release a few plots at a time to inflate prices - this practice needs to be dealt with.
Are you saying that in your area there are sufficient people right now with deposits and mortgages arranged to buy any amount of houses that builders offer?0 -
Why does a developer need to sell a house at 3 times the 2000 price to make enough profit to make it viable?
Cost have not risen by that much, in fact labour costs have fallen signifcantly.0
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