Panorama tonight: The Great House Price Bubble?

kabayiri

leveller2911 wrote: »

Maybe because he feels like a failure, his job is to provide for his family.

Do you know anything about him?, his personal circumstances?

In my view, he was a good example of the lower paid in society who show commitment.

He was trying to provide for his family. I am sure his perceived shame of the food bank was genuinely felt.

He didn't seem intent on fathering 29 kids, just so that he could march 'down the council' and demand a 9 bedroom villa, to be featured in a double page spread in the Daily Mail.

But he should not be considered a HTB candidate. His income is just too low.

He is a potential victim of rising rental prices though, presumably a byproduct of an overheated housing market.

CLAPTON

leveller2911 wrote: »

I don't agree, If more land was released for building then developers will drip feed properties on the market purely to keep the prices up.

What do developers gain from flooding the market with properties ?.

there are thousands of builders

some in your locality

do you really believe that all these people, big and small collude together to hold prices up

do you really believe that not building is more profitable than building

if so why are they building more now : surely complete stupidity


and have you looked at the dividends paid out over the last 5 years but he big boys? (just so you can tell us how much money those fat cat shareholders made on the backs of the workers.

leveller2911

CLAPTON wrote: »

there are thousands of builders

some in your locality

do you really believe that all these people, big and small collude together to hold prices up

do you really believe that not building is more profitable than building

if so why are they building more now : surely complete stupidity


and have you looked at the dividends paid out over the last 5 years but he big boys? (just so you can tell us how much money those fat cat shareholders made on the backs of the workers.

No I don't believe all builders big and small collude to fix the market but the large developers would.

Land is in finite supply and developers are obliged to maximise the profit for their shareholders. So are they going to maximise their profit per acre by flooding the market with new builds which in turn would more than likely make the prices fall or drip feed the properties on tha market which in turn will support the high prices.
If you go back 2-3 years Fungus and Judith Wilson were in trouble and the very real fear was that if they went pop the housing market in Ashford (Kent) would fall through the floor due to a surplus of supply.

Its no different to the national state of the housing market, flood the market prices fall and so does the profit per unit. Or do you see this as being different from say Polish builders coming to the uk ,labour rates dropped as supply increased, 3 D printers are very expensive ,flood the market with cheap chinese imports and the price will drop per unit. I don't see housing stock as any different as to many its just a commodity apart from the finite land supply.

Its a known fact that the large construction companies and developers manipulated the labour market to blacklist union members when labelled as trouble makers . That was a conspiracy of 44 large companies so why is it not possbile for the big boys to manipulate the housing market?.I'm no lefty but that was beyond the pale, good tradesmen never worked again because no on would employ them, all due to a conspiracy by big companies withing the construction industry.

wotsthat

leveller2911 wrote: »

I don't agree, If more land was released for building then developers will drip feed properties on the market purely to keep the prices up.

What do developers gain from flooding the market with properties ?.

Builders don't realise a profit until they sell the land with a house on it. Given the apparent shortage of housing there's a massive opportunity for a builder to go on a massive building spree and make a bomb.

That would be the natural response of a company to high prices and high demand. That makes me think that the long term lack of supply response isn't due to builders having a cartel like grip on the amount of property being released.

CLAPTON

leveller2911 wrote: »

No I don't believe all builders big and small collude to fix the market but the large developers would.

Land is in finite supply and developers are obliged to maximise the profit for their shareholders. So are they going to maximise their profit per acre by flooding the market with new builds which in turn would more than likely make the prices fall or drip feed the properties on tha market which in turn will support the high prices.
If you go back 2-3 years Fungus and Judith Wilson were in trouble and the very real fear was that if they went pop the housing market in Ashford (Kent) would fall through the floor due to a surplus of supply.

Its no different to the national state of the housing market, flood the market prices fall and so does the profit per unit. Or do you see this as being different from say Polish builders coming to the uk ,labour rates dropped as supply increased, 3 D printers are very expensive ,flood the market with cheap chinese imports and the price will drop per unit. I don't see housing stock as any different as to many its just a commodity apart from the finite land supply.

Its a known fact that the large construction companies and developers manipulated the labour market to blacklist union members when labelled as trouble makers . That was a conspiracy of 44 large companies so why is it not possbile for the big boys to manipulate the housing market?.I'm no lefty but that was beyond the pale, good tradesmen never worked again because no on would employ them, all due to a conspiracy by big companies withing the construction industry.

so how does it actually work in practice


for say 1,2,3 or 4 years all the big boys agree to build very few house even though there are lots of people will large deposits and mortgages queuing up to buy

but they are resolute and don't sell
of course they make little or no profit and have no money to pay shareholders any dividends
the banks get a bit anxious as they can't make payment on the debts
the big shareholder revolt and sack the top management

but no matter they still don't sell

then after the 4-5 years with land price sky high they the start building and make a fantastic profit for a few years but then price drop and they respond by stop building?



all this time, the other thousand or so builders just stand by and let it all happen and ignoring the fact they could make a killing themselves with high prices and no competition

anyway you can PROVE your point by showing this cyclic pattern in new house sales and the profits of the big boys



Furgus and Judith weren't builders and were small beer with local influence over a limit market place.

Black listing a few workers is very different from stopping other builders entering the market place if there were good profits to be made... very few barriers to entry and plenty of skilled workers available (all those black listed boys make a good start)

I know you wont but just look at the a/cs of the big boys over the last few years and tell us how much dividend they paid to their shareholders

Loughton_Monkey

wotsthat wrote: »

Builders don't realise a profit until they sell the land with a house on it. Given the apparent shortage of housing there's a massive opportunity for a builder to go on a massive building spree and make a bomb.

That would be the natural response of a company to high prices and high demand. That makes me think that the long term lack of supply response isn't due to builders having a cartel like grip on the amount of property being released.

The only 'cartel' I can imagine operating [although I doubt that it is] would be some sort of 'gentleman's agreement' on bidding for various large plots in various areas of the country. It would be 'helpful' to them to have a quarterly 'long lunch' in which they review the new large plots coming up - which could only be developed by one of the top 5 or 6 - and work out buggin's turn so that there is little or no real competitive bidding.

Builders have, I believe, been in the frame many times for this when it comes to large public construction projects, so why not on their own private ones?

However, once the land is in their possession, fair means or foul, it will presumably have 'outline planning permission' anyway. I suspect the length of time taken to bring home the profit is taken up by red tape, actual planning permission, negotiations, and sheer logistics. All of which are non-trivial.

It is not unreasonable to assume a 5 year elapsed time from bidding/owning the land, to the eventual building, fitting out of the showhouse, and sale of first house. In this case, there would always be 80% of land still unsold, and probably 70% not even built upon. The concept of 'sitting on' or 'mothballing' of land is, I think, largely an urban myth. Probably something to do with awaiting for the 'colour' of the local authority to change because the current one is being too difficult in its requirements. The Brownie Points are in profit. Nothing else.

leveller2911

CLAPTON wrote: »

I know you wont but just look at the a/cs of the big boys over the last few
years and tell us how much dividend they paid to their shareholders

So you think I either won't bother looking or you don't think I'm capable of finding out. I am capable of looking and did but I'm not quite sure why you would say I wouldn't.


Given the huge amounts of building land banked by construction companies and the massive demand why haven't they started building en-mass?. They have the funding, the land and the demand but they won't build on a scale they are capable of. Why?.

If an area the size of Ashford is earmarked for 31,000 new homes and we have the ability to build them all within 5-10 years why aren't they?. Why do Bovis etc drip feed 50 or so on the market at a time. The Park Farm development was the same, they drip fed 30 at a time, nothing to do with only having enough builders to build 30 at a time and the demand was there and the labour to build them was there.

Of coarse the company board of directors etc have to keep the shareholders on board but as I already mentioned they make profit which is the main point. Profit wise if your starting from a small profit per unit they wouldn't have to increase the margin much to keep the shareholders on side.

Given the fact that they have the land , they have the labour and they have the demand why don't they build on a national scale and don't say because people can't get mortgages now that we have the HTB schemes running over the past couple of years, foreign investors etc.

Pobby

It was very interesting to see the ( nice ) couple in Reading. I was born and raised there so know it well. Those type of terraced houses were fine starter home for many. Late 90`s, I doubt you would be looking at no more than £50k for a 3 bedroom home. Bear carefully in mind that interest rates were were about 12 times higher than now.

A joint income would be at least £20k a year I think. Bear also in mind that fuel, food and so on were far cheaper. So to raise a deposit to buy would be a lot easier.

Just shows the overall insanity in my mind.

co-op_lover

ruggedtoast wrote: »

http://www.bbc.co.uk/programmes/b03j0nw1



Should be a good expose of the dysfunctional state of the housing market at the moment and the damage the cost of housing is doing to ordinary people trying to make their way in the world.

I imagine the usual suspects on here will just stick their fingers their ears and shout "LALALALALALALA people who cant afford houses are lazy LALALALA!".

Do you think the exhausted house bubble was reinflated?

ukcarper

Pobby wrote: »

It was very interesting to see the ( nice ) couple in Reading. I was born and raised there so know it well. Those type of terraced houses were fine starter home for many. Late 90`s, I doubt you would be looking at no more than £50k for a 3 bedroom home. Bear carefully in mind that interest rates were were about 12 times higher than now.

A joint income would be at least £20k a year I think. Bear also in mind that fuel, food and so on were far cheaper. So to raise a deposit to buy would be a lot easier.

Just shows the overall insanity in my mind.

The thing the 90s were a very good time to buy property in fact in relation to earnings they were the lowest they have been since the 40s maybe longer. That's not to say prices aren't high now but there hasn't been many times in the past when in has been easy to rent with children and save a deposit.