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Brexit, Mark Carney and the housing market
Comments
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As you probably know, I am in the process of self building a modest 3 bedroom house.
Leaving out land cost and planning cost, the actual construction cost is so far standing at £130K and will probably hit £150K by the time it is actually finished. That is just about £1000 per square metre, you really would struggle to build for less than that with todays material and labour costs.
So even if building land was free and planning permission was free, if you are hoping for a 3 bedroom house to be built and sold for £50K then I can assure you not a single house will get built.
There are plenty of houses already built.0 -
If you're paying £150k JUST on build costs for a 'modest' 3 bed property then someone is seriously taking you for a ride.
Yep, admittedly the last time I was involved in house building was in the 1980`s, but a couple of good brickies can knock up the basic structure of a decent house very quickly, matter of days, but I do clearly remember helping out a couple of people who had tried self-build and got into a real pickle, close to divorce over it type stuff, so I hope this isn`t the first time he has tried it
Worst possible market to be throwing money at property AND building it yourself IMO. 0 -
Quote:
Originally Posted by ed67812 View Post
Despite what the Daily Fail reports...
Why bring this irrelevant comment into the discussion? All the reports I have heard and read have been on the BBC!
Because the BBC lead story had an excellent explanation of what stress testing meant and how the parameters are deliberately set beyond even the worse case scenarios. The articles in other more sensationalist parts of the media seemed to lack this and other key information, so my comment was hardly irrelevant.0 -
AnotherJoe wrote: »In another thread yesterday, someone poimted to some houses for sale in Wales. These were newbuilds, 3 bed terraces, looked pretty nice, going for £90k. That would have included land, bulding costs and profit for the builder.
Where the dickens was that?
Would love to know as I'm in the house building game and our clients houses aren't going for that!0 -
As you probably know, I am in the process of self building a modest 3 bedroom house.
Leaving out land cost and planning cost, the actual construction cost is so far standing at £130K and will probably hit £150K by the time it is actually finished. That is just about £1000 per square metre, you really would struggle to build for less than that with todays material and labour costs.
So even if building land was free and planning permission was free, if you are hoping for a 3 bedroom house to be built and sold for £50K then I can assure you not a single house will get built.
Which is why rebuild costs for home buildings insurance, is often more than the market value of the property.
Presumably, if a mid-terraced house (for example) is fire damaged and needs to be completely rebuilt, this needs to be done at a loss (relative to resale value) - because obviously the neighbours either side need the house rebuilding!Selling off the UK's gold reserves at USD 276 per ounce was a really good idea, which I will not citicise in any way.0 -
gettingtheresometime wrote: »Where the dickens was that?
Would love to know as I'm in the house building game and our clients houses aren't going for that!
Google 'Persimmon snowline'Selling off the UK's gold reserves at USD 276 per ounce was a really good idea, which I will not citicise in any way.0 -
Because the BBC lead story had an excellent explanation of what stress testing meant and how the parameters are deliberately set beyond even the worse case scenarios. The articles in other more sensationalist parts of the media seemed to lack this and other key information, so my comment was hardly irrelevant.
So they "stress test" for interest rates at 4% when they were at 5% before the last meltdown, and they didn`t see it coming last time but are allegedly prepared for all outcomes this time because they are doing "stress tests"? Best to take everything that MC says with a pinch of salt IMO, these comments are just designed to undermine Brexit IMO, the banks are still vulnerable to global events, but the funny thing is that they banged on about house prices dropping before the vote and the majority still voted to leave
The appetite among the public for decades worth of debt for basic shelter is definitely waning IMO. 0 -
I thought they stress tested up to 7/8%, at least in the UK? In any event, far more important than borrower stress testing is the levels of capitalisation banks are now required to meet. If a recession hit to similar levels of 2008 the banks could withstand it many, many times over. The point being there would not even be a need to reduce rates into negative territory.
2008 was a banking credit crunch/crisis, the last real recession that actually affected people badly was in the early 80`s, easy credit has seen to it that people don`t experience real austerity any more, IMO anyway. They can`t reduce rates any more either, and the massive QE experiment hasn`t produced the growth results many hoped it would, plus the US is now raising rates and we have countries like Turkey with rates at what 24% at one point recently? With all the shadow banking/derivatives etc. nonsense that goes on I would say a big banking crisis is even more likely than in 2008, and the more MC and co. bang on about "stress testing" etc. the more I think that they know there are problems waiting in the wings. Even ignoring China/Trump and other global problems Italy/Turkey/Brexit has the potential to cause massive upsets to credit markets. Really really not the time to have a bubble mortgage IMO.0 -
I thought they stress tested up to 7/8%, at least in the UK? In any event, far more important than borrower stress testing is the levels of capitalisation banks are now required to meet. If a recession hit to similar levels of 2008 the banks could withstand it many, many times over. The point being there would not even be a need to reduce rates into negative territory.
Sorry, just to add, the idea that the average person in London/SE with a recent mortgage could withstand rates anywhere near 7/8% isn`t even funny to me, it is scary!0 -
When I took out my mortgage it was stress tested for 10% not 7/8%.I thought they stress tested up to 7/8%, at least in the UK? In any event, far more important than borrower stress testing is the levels of capitalisation banks are now required to meet. If a recession hit to similar levels of 2008 the banks could withstand it many, many times over. The point being there would not even be a need to reduce rates into negative territory.Paid off the last of my unsecured debts in 2016. Then saved up and bought a property. Current aim is to pay off my mortgage as early as possible. Currently over paying every month. Mortgage due to be paid off in 2036 hoping to get it paid off much earlier. Set up my own bespoke spreadsheet to manage my money.0
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