Tories say they'll build lots of houses and sell them at a discount to FTB

kaya

I don't understand why anybody believes a word any politician says when there is an election looming

CLAPTON

daveyjp wrote: »

What I am saying is land has a value and it is owned by somebody.

If it is too cheap owners won't sell. So the concept of "cheap" land doesn't exist as it is directly related to the end value of the property.

Would you sell you current house for £5,000?

I don't understand what you are trying to say


Whatever the price of land to the owner, one only has to offer a little more to encourage 'some' owners to sell.
Land is being bought and sold all the time.
In many (most) parts of the country the 'price' of land critically depends upon whether it can be built on (planning permission) and for what purposes (houses, commercial, industrial etc).

Brown field sites are not necessarily poisoned wastelands but may simply be a commercial building (shops etc).

If the cost of developing brown fields in a particular location can't be recovered from the selling price of the finished product then the job won't get down unless government steps in and carries the cost.
This will often be a reflection on the lack of demand for housing in the areas or ready availability of alternative land.

In this particular tory proposal it's not at all clear whether there is any government money available atall (except HTB) or whether they are simply going to allow commercial zoned to be rezoned as residential and removing zero emission requirement and 'affordable' housing requirement removed.

we will have to wait for the details

allthingsmustpass

Base rates back to historical norms solves all of this. Silly schemes.

CLAPTON

allthingsmustpass wrote: »

Base rates back to historical norms solves all of this. Silly schemes.

difficult to see why higher interest rates, will cause more houses to be built.

wymondham

CLAPTON wrote: »

difficult to see why higher interest rates, will cause more houses to be built.

possibly to put a brake on house price rises and therefore builders would be able to sell more at a reasonable level?

CLAPTON

wymondham wrote: »

possibly to put a brake on house price rises and therefore builders would be able to sell more at a reasonable level?

that would seem absurd.

wymondham

CLAPTON wrote: »

that would seem absurd.

why? Reduce price and sell more of..?

CLAPTON

wymondham wrote: »

why? Reduce price and sell more of..?

if interest rates rise why would prices fall?


well because the same level of mortgage will cost more per month as the interest will be higher


so for any income level, people will only be able to afford a smaller mortgage and hence a property at a lower price.


this will indeed tend to reduce the price of properties but obviously does not increase the number of people who can afford to buy with the new price/higher interest combination.


so no new effective demand and so no new incentive to build : indeed from the builders' point of view he gets less money so can afford to build fewer houses at any give cost level. The builder will probably reduce the land they buy and this will apply some downward pressure on land prices and the builders can try to pay the staff less but the overall effect will be fewer houses.

Graham_Devon

Well, I'd just like to say I was right

Suggested some time ago that the next wheeze on the HTB scheme would literally be giving away the 20%!

It's a bit silly really. Just creates a "lucky" few, who will likely get 20% off a 20% overpriced house.

allthingsmustpass

CLAPTON wrote: »

this will indeed tend to reduce the price of properties but obviously does not increase the number of people who can afford to buy with the new price/higher interest combination.

Depends on your definition of 'afford'. Buy when rates are low and you are in serious trouble when they inevitably rise.

Buy when rates are higher for similar outlay each month and you're less affected when rates rise.

People buying now and recently can't afford it, they just haven't realised yet. They will when rates rise.