High house prices rising in working class areas, is it fair and is there anything that can be done?

zagfles

RMiller95 said:

Hi user1977,

Its not an affordable house that we are looking at and there is specific criteria for getting them so its just a 'normal' house we are looking to buy. Yes there is demand but I can't see how its justified when they are pricing people out of them or forcing people into a worse financial position especially given the current energy situation and increase in mortgage rates going forward. 

Hopefully all these things will result in the current housing bubble bursting and more realistic prices. Personally I wouldn't be buying now (unless I had to), but other peoples' crystal balls might disagree...

daveyjp

RMiller95 said:

Daveyjp,

It is excessive when you look at how much they actually make per property and how big the site is. I could understand if it was a smaller amount but the house prices are already inflated as a result of the market which is fair enough, but the inflated price should cover the increase in materials instead of capitalising on a bleak situation for new and first time buyers.

How much do they make per property?

RelievedSheff

RMiller95 said:

Hi user1977,

Its not an affordable house that we are looking at and there is specific criteria for getting them so its just a 'normal' house we are looking to buy. Yes there is demand but I can't see how its justified when they are pricing people out of them or forcing people into a worse financial position especially given the current energy situation and increase in mortgage rates going forward. 

Whilever people are willing and able to pay that price for those houses then that is what they will sell them for.

They have no obligation to provide cheaper housing due to rising energy costs (which lets not forget affect the developers themselves) nor increasing interest rates. None of which are dictated by the developers anyway and have no bearing on what they will sell the properties for.

74jax

Talking as a long term BDW employee in the Northeast, if the houses don't sell at the increased price, they'll come back down. 

A ten year plus build is a huge development, I'm thinking Great Park or Scotswood? Are there other builders in the development, can you go with them instead. Different house type but same development? 

Do you have the profit per plot available? BDW half year figures aren't out yet, and I know another who hadn't published to city yet either. I'm wondering if you are maybe going off previous years profit per plot, not the most recent data? 

Thrugelmir

RMiller95 said:

Elliott.T123 said:

RMiller95 said:

Hi user1977,

Its not an affordable house that we are looking at and there is specific criteria for getting them so its just a 'normal' house we are looking to buy. Yes there is demand but I can't see how its justified when they are pricing people out of them or forcing people into a worse financial position especially given the current energy situation and increase in mortgage rates going forward. 

Unfortunately the housing developers don't care if they price some people out, they don't care if they put buyers into worse financial positions, they don't care if a price rise is justified or not.

All they care about is what is the highest figure we can price a house and it still sell to someone, as long as there are people willing to pay the price then they aren't bothered if that prices out others.

To be fair to them that isn't unique to house builders, if you owned a house and it went up in value 50% would you put it on the market at that new value or would you say, you know what that isn't justified and might price people out, I am only going to price it at a 10% increase to be fair to other people

I totally understand for a private seller, but for a national house builder, surely they have a duty to the local public to ensure they aren't going above and beyond. If not, there should be something in place so they can only make a certain percentage of profit per house or a house type in an area should be capped.

If only running a business were that easy. Starbucks make huge margins on every cup of coffee they sell. The cost of the drink itself is only part of a far more complex business model. 

Norman_Castle

RMiller95 said:

Elliott.T123 said:

RMiller95 said:

Hi user1977,

Its not an affordable house that we are looking at and there is specific criteria for getting them so its just a 'normal' house we are looking to buy. Yes there is demand but I can't see how its justified when they are pricing people out of them or forcing people into a worse financial position especially given the current energy situation and increase in mortgage rates going forward. 

Unfortunately the housing developers don't care if they price some people out, they don't care if they put buyers into worse financial positions, they don't care if a price rise is justified or not.

All they care about is what is the highest figure we can price a house and it still sell to someone, as long as there are people willing to pay the price then they aren't bothered if that prices out others.

To be fair to them that isn't unique to house builders, if you owned a house and it went up in value 50% would you put it on the market at that new value or would you say, you know what that isn't justified and might price people out, I am only going to price it at a 10% increase to be fair to other people

I totally understand for a private seller, but for a national house builder, surely they have a duty to the local public to ensure they aren't going above and beyond. If not, there should be something in place so they can only make a certain percentage of profit per house or a house type in an area should be capped.

They're a commercial company aiming to make a profit. You're assuming the prices are too high and therefore unfair. If they sell for this price buyers will have decided the price is acceptable. If profits were capped unprofitable buildings wouldn't be built. You're assuming they're making a big profit, they will have expectations of a profit margin which if they don't meet its not worth building.

As above, if you owned the property would you reduce the price if you didn't have to? If you were a builder or supplier or sold the land to them would you have worked or sold at a discount?

sammyjammy

Its called a capitalist economy, it doesn't have to be fair, just legal!

[Deleted User]

Prices obviously arent too high for the area as they are still being sold.  They are just too high for you.   There is a clear difference. As you are being priced out of it then you clearly feel it is unfair.   Its not though,  if everything worked on that basis then I would be living in a 10acre property with a fishing lake.   Everyone has to buy a house at a level that is affordable to them.  Its simple supply and demand that dictates pricing for new builds.   Enough people have shown a willingness to buy at a higher price so therefore thats what they are worth

Ramouth

The building companies have a duty to their shareholders as well as customers.  Many of these shares will be held by pension companies and individuals.  It is easy to think of large companies as big bad business but often when you really get down to it they are owned by lots and lots of people like you and I.

Marvel1

No clue about the prices in that area, but have you looked at second hand homes?