Base Rate Cut; Will house prices take off again?

adr0ck

jamescredmond wrote: »

easily, if you're a builder. the serious outlay lies in land purchase.

there's more chance of getting served down my local by the pope than seeing a 50% cut.

barring global meltdown/war/comet strike.

in which case it'll be: a pint of holy water my old mate benedict.

theres no easy thing about it (you can't do it) .....and because it can't be done...this is why prices cannot crash 50% (they can't even crash 30%) you just cannot build a 3 bedroom property for this money (its impossible)

i agree with your pope comment....make mine a pint of vodka

adr0ck

hgllgh wrote: »

It was the principle that I was trying to get over but seeing as you have made the assertion, why can we not compare the Japanese market to the UK. It doesn't really matter how they (and the UK) got there but both have/had stupidly overpriced property, similar population levels, similar interest rates and Japan had twice the levels of employment that we have now in the UK (which probably doesn't even take into account the millions on other types of benefit that are not registered as unemployed)....

do some research on japan (and especially how quickly they replace their housing stock and compare that to the UK) and you will realise that you cannot compare them at all

WTF?_2

adr0ck wrote: »

theres no easy thing about it (you can't do it) .....and because it can't be done...this is why prices cannot crash 50% (they can't even crash 30%) you just cannot build a 3 bedroom property for this money (its impossible)

i agree with your pope comment....make mine a pint of vodka

Gosh - how long ago was it that houses cost on average 30% less than they do today? Has the cost of building a house really risen by that much in that period of time?

:rolleyes:

Clue: The sales price of a house bears little relationship to the cost of building it. Especially since there are millions of houses out there decades old which have long since been paid for.

lady123_2

Things will stagnate for a year or so, its no bad thing property isn't going up by the amounts it has been.
I think it will matter what area you have bought in, some of these new builds are way over priced, plus the btl market has fueled things, not sure about anyone else, but here in London, things are still holding up well,(well the cheaper areas anyway, lol).
Employment/Migration and the amount of people that need homes in London will keep it ok.

adr0ck

!!!!!!? wrote: »

Gosh - how long ago was it that houses cost on average 30% less than they do today? Has the cost of building a house really risen by that much in that period of time?

yes for a variety of reasons

inflation
including wage inflation for all trades especially brickies & plumbers
materials costs especially the price of timber, steel (all metals), stone, concrete etc (landfill tax has had a big bearing on this)- China is also eating everything!!!!
building regs (these have put costs up and up) - in a few years time all new builds will have to be zero carben - this means over the course of 12 months you have to generate all your energy needs (you will generate excess in the summer months and need to use the grid in the winter months - but over the course of the year you will use what you generate) - how much do you think this is going to cost?

to connect water = £1000
gas = £1000
electric = £1000
NHBC = £1000
PP = £500
BLDG Regs = £500

so you have now spent £5000 (out of your £40000) before you've started to build anything

obviously the above doesnt include any design fees, engineer fees, geotechnical fees, any of the fees associated with PP (open space provision etc)

you have not built anything yet

adr0ck

the reason i mention services connections costs is because a few years ago the government used to subsidise a parts of these costs (so they were obviously cheaper) they don't anymore

adr0ck

!!!!!!? wrote: »

Clue: The sales price of a house bears little relationship to the cost of building it. Especially since there are millions of houses out there decades old which have long since been paid for.

yes true in a way...but i'm talking of a new house at a current price of £195K

therefore counting a 50% crash say £100K

this is where i'm getting my £40K build costs from

£40k land
£40K build
£20K profit (includes estate agent costs / solicitors costs / interest cost etc)

jamescredmond

adr0ck wrote: »

theres no easy thing about it (you can't do it) .....and because it can't be done...this is why prices cannot crash 50% (they can't even crash 30%) you just cannot build a 3 bedroom property for this money (its impossible)

i agree with your pope comment....make mine a pint of vodka

OK. what I'm about to tell you comes from a builder friend of mine, so don;t chew my head off if you disagree:

a plot land came onto the market for £120k in our village last summer.

he toyed with the idea of building a 2 storey on it until planning regs made it clear he could only build a bungalow.

I asked him how much he thought the building work would cost.

without hesitating he replied: 40-50k depending on spec.

I said I didn't think this was possible.

much of the work to be done by himself and his father.

the land soon after was withdrawn from sale, so I couldn't test his figures.

the figure doesn't include the ususal bolt- ons or the actual labour value,
but he insists that this figure is accurate.

in this village a 3 bed detached fetches @£230k.

hedgefund

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Interest rates could be cut to 0% and prices would still crash. I'm absolutely serious.


eh, i don't think so somehow. :rotfl: If interest rates went down to 0% I for one would be very very happy and very very content and would even think of buying more property!

granville_2

All is not well with the UK economy despite the government spin.

Have a look at http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/02/08/cnukecon108.xml

"The UK household sector is borrowing at a cyclically unprecedented 4pc of GDP. Allowing economic growth to be based on unsustainable asset price bubbles was always going to be a recipe for disaster because the snapback can be vicious. This is a mess of the policy-makers' own making."

I don't believe it's all about the level of interest rates anymore. If you believe in markets, then you believe in market cycles - what goes up must come down.

IMO we've been under the illusion that we've been getting richer, when in fact we are all getting into more debt.