Developers Pushing Help to Buy Big Time

grizzly1911

CLAPTON wrote: »

I wasn't suggestinthat brickies, plumbers etc would have the management skills or access to finance.

My point is that, if there is so much profit in house building why don't all those people who do have the management skills, jump in an make huge fortunes as there are plenty of skilled workers available to actually carry out the work.

Are there large profit margins in house building or is it in the land bank management transacted in a tax efficient manner.?

CLAPTON

Graham_Devon wrote: »

It's all in the land banking...

Your point is a rather weird one. You may aswell simply claim a few engineers could get together and start competing with Shell.

do try to concentrate


it is said that
- builders profits are huge
- the big boys are deliberatley not building to increae prices

but
- barriers to entry are very low (all the building skills are readilly available and self employed too)
- land is difficult to acquire but nevertheless is becoming available all the time
-banks and venture capitalists are willing to lend to certs and with relative short time scales of returns.

it has nothing to do with Shell (huge barriers to entry, long time scales for cash return, massive uncertainty, huge capital required etc )

and by the way which part of the government debt history do you wish to suppress?




n

CLAPTON

grizzly1911 wrote: »

Are there large profit margins in house building or is it in the land bank management transacted in a tax efficient manner.?

It is alleged that builders profits are huge and they deliberately sit on their land banks to suppress supply and so to maximise profit.

I am challenging that view as it seems to make no sense unless other factors are at play (like insufficent demand (due to mortage famines, planning issues, corruption) or simply small profits).

wotsthat

Graham_Devon wrote: »

You may as well simply claim a few engineers could get together and start competing with Shell.

Not quite. There are huge financial barriers which effectively prevent a couple of engineers competing with Shell without serious backing.

However, you or I could buy a piece of land, get planning, build a house and sell it. The big builders have an advantage of scale but the margins are so massive we'd make a bomb I'm sure.

We'd find it much easier to set up Devon & Wotsthat builders than Devon & Wotsthat oil & gas exploration.

grizzly1911

CLAPTON wrote: »

It is alleged that builders profits are huge and they deliberately sit on their land banks to suppress supply and so to maximise profit.

I am challenging that view as it seems to make no sense unless other factors are at play (like insufficent demand (due to mortage famines, planning issues, corruption) or simply small profits).

There is no money in energy and fuel retailing. Makes you wonder why they bother either really. Car dealers never seem to make much either.

I am sure the actual retail house build margin is relatively small. I am sure affordability and hence demand is a big issue.

Without turnover the financing cost ,of land held, must start to make a pretty big dink in profits.