Friday, Mar 16, 2018

Refusal to increase building

Guardian: Berkeley: We can't meet government demands for extra new homes

Berkeley don't think they can increase profits by increasing housebuilding, and point out a number of government related factors. Costs of moving homes, planning difficulties, mortgage limits, btl tax relief changes and economic uncertainty. I do have some sympathy for house builders in fact, because if you potentially facing ongoing falls in the underlying valuation of the land with planning permission, then popping flats or houses on top won't save you from a loss, because its not what people are buying. As construction costs haven't changed. So now May, who is useless, is either going to be forced into government action a la Corbyn or do nothing (

Posted by stillthinking @ 10:56 AM (4902 views) Add Comment

3 Comments

1. stillthinking said...

https://www.telegraph.co.uk/business/2018/03/13/buy-to-let-bubble-bursts-mortgages-issued-landlords-fall-four/

BTL is now in decline and this is over 10% of the mortgage market, its clearly more than a marginal buyer leaving the game. In the end, in the UK, the government are either going to ease planning permissions or they are not. I missed getting it in the header post because my comment was too long, but evidently May jawboning is just more white noise she may as well be singing a Christmas song.

Friday, March 16, 2018 11:34AM Report Comment
 

2. mombers said...

Why would they build if the value of the land goes up without them lifting a finger? And if the value of the land does go down, they can change the parameters so that it's still profitable - e.g. renege on affordable housing quotas or demand higher density than the land was sold subject to. Price signals have no effect on builders, they simply build approx 1 home for each exiting one sold.

Friday, March 16, 2018 12:39PM Report Comment
 

3. britishblue said...

Value and land in and around London has dropped in the last year. But i bet for a lot of housebuilders the 'vlaue' of the land will remain the same on their balance sheet. Therefore, not building houses means the company has a higher value. Whereas, if they built on land that cost them peanuts, but had already up valued the land they would show a loss.

Saturday, March 17, 2018 01:15PM Report Comment
 

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