How bad will it get?

thriftybabe

Having had another discussion with my OH who is burying his head in the sand i am feeling quite frustrated!

Thank goodness for this site! He works in the building industry and thinks that he is still going to get work no matter what happens! We work for quite a number of companies and have built up a good reputation as giving good service, get their numbers that they require and completing the jobs satisfactorily.

I am frustrated as we are in a pretty decent position. We have no mortgage, have savings in the bank and no debt. Our business balance is healthy with no debt attached to it either. He would like to do a large extension on house (we do not actually need this) and is determined to follow it through. It is going to cost around £60k. We have savings to cover this and will have some money left over should things get really bad in the building industry. I have told him to forget about this just now as we do not know how long this is going to last for. If we keep our savings and do not earn a penny then we will be able to live comfortably for 3 - 4 years. However, if he blows it on an extension that we do not actually need then things may become difficult.

He maintains things will be right and is ever optimistic. I am at the other end of the scale as very pessimistic.

Sorry long boring story but does anyone have any idea how bad they think things will get. If any builders were working during the last bad spell of construction please let me know how work was at that time.

ic

Why would there be a bad spell in construction approaching? This country is massively short of housing, so builders are going to be busy for some time to come surely? I'm sure new build houses are always going to sell at a profit, regardless of what the market says they're worth.

posh*spice

I agree with you thriftybabe. If you wait and the downturn doesn't happen then great. We'll probably know in the next 6 months how bad things are going to get. Additionally, if we do go into a bad recession , an extension will be much cheape next year.:D Hold your ground in thsi debate.

thriftybabe

Construction Industry is having problems. Lots of payoffs happening at the moment. One of the sites my OH was working on has stopped altogether as no sales. Have heard of others that it is happening to. 30 letter went out this week to lay off staff in one company with another 120 being written up in the next few weeks. We know lots of people high up in well paid jobs who are looking over their shoulders waiting on the axe to drop.

Sure there is supposed to be a shortage of houses but no-one can buy due to credit crunch therefore sites all over the country are closing at an alarming rate. The housebuilders are saving money at every corner trying to keep afloat during this time. They are used to selling a certain amount of houses every week around 300 I was told all over the country and seemingly last week there were only 2 sold. That in itself is painting a picture of an industry in trouble.

We hope we will be okay to Christmas with work as there is one job that we will hopefully get but after that who knows.

Pobby

Thriftybabe. You are being very sensible in holding off. I am not in construction but the market I am in is taking a real hammering. The largest chain of retailers in the industry is in administration. I am buckled in for a bumpy ride.

WTF?_2

ic wrote: »

Why would there be a bad spell in construction approaching? This country is massively short of housing, so builders are going to be busy for some time to come surely? I'm sure new build houses are always going to sell at a profit, regardless of what the market says they're worth.

I think you're about to get a shock - most of the so-called 'shortage' was down to not being able to meet an inflated 'demand' stoked by large of amounts of cheap and easy to get credit. If there was such a shortage of housing, why haven't we seen sky-high rents to go with the sky-high house prices coupled with massive amounts of homelessness?

Now that this particular asset class bubble has deflated, you'll be seeing a lot less demand in the future which is why builders' stocks have been taking a hammering on the markets.

Trollfever

How bad will it get? = Unprecedented.

beingjdc

ic wrote: »

Why would there be a bad spell in construction approaching? This country is massively short of housing, so builders are going to be busy for some time to come surely? I'm sure new build houses are always going to sell at a profit, regardless of what the market says they're worth.

http://news.bbc.co.uk/1/hi/business/7402762.stm

Generali

The last time around things were very tough for builders. I remember talking to a painter and decorator in a rich part of Surrey who was being undercut by painting gangs coming down from Liverpool and Manchester and working for £30/day each.

This time around there are things to suggest that tougher times are in store (the boom was bigger, oil etc prices are very high and rising) and others to suggest things will be easier (annecdotally at least, lots of skilled immigrants are leaving, interest rates aren't at 15%, unemployment rates are relatively low).

My guess is that things will be quite bad and for a long time. As ever, hope for the best and plan for the worst.

Trollfever

Just to add:

The Government is bust.
The Banks are bust.
The People are bust.

poppysarah

How bad?

We're at a stage where MPs get their bog roll paid for as "expenses", buy second homes on expenses and then put them in trusts to preserve them for their kids and charge us rent.

Do you think they'll let the system crumble until they've all sorted out their financial futures.