chkee Posted June 19, 2009 Share Posted June 19, 2009 (edited) Since the start of the Credit Crunch in September 2007 the UK's residential property builders have continued to build - no option really as it's their only business revenue. Staff were laid off, work purposefully slowed and completion dates on many new developments were put back in their anticipation of a quick recovery, this hasn't happened. These projects are funded by massive borrowings and interest payments, the lack of income through completion of these developments is unsustainable and they will very soon have to bring these developments onto the market at heavily discounted prices, such as Galliard Homes so called half-price sale --- http://www.galliard-homes.co.uk/. Great news for some? FTB'ers - perhaps some prices will be low enough to attract them, especially if deposit incentives are included, but many of these developments were designed with the boom buyers in mind and will not be affordable for FTB'ers, even if heavily discounted = minimal impact 1RM'ers (1st Rung Movers, previous FTB'ers moving up) If, and only If prices are discounted enough and there is mortgage availability = minimal impact EA's /Bulls - Increased market activity/interest will be (falsely) seen as recovery = false hope Bears - Volume of discounted properties flooding the market will increase the current high property-to-buyer ratio further, resulting in further lowering of prices as everybody competes for the same few buyers. = HPC continues Edited June 19, 2009 by chkee Quote Link to comment Share on other sites More sharing options...
Tim Miller Posted June 19, 2009 Share Posted June 19, 2009 (edited) Since the start of the Credit Crunch in September 2007 the UK's residential property builders have continued to build - no option really as it's their only business revenue.Staff were laid off, work purposefully slowed and completion dates on many new developments were put back in their anticipation of a quick recovery, this hasn't happened. These projects are funded by massive borrowings and interest payments, the lack of income through completion of these developments is unsustainable and they will very soon have to bring these developments onto the market at heavily discounted prices, such as Galliard Homes so called half-price sale --- http://www.galliard-homes.co.uk/. Great news for some? FTB'ers - perhaps some prices will be low enough to attract them, especially if deposit incentives are included, but many of these developments were designed with the boom buyers in mind and will not be affordable for FTB'ers, even if heavily discounted = minimal impact 1RM'ers (1st Rung Movers, previous FTB'ers moving up) If, and only If prices are discounted enough and there is mortgage availability = minimal impact EA's /Bulls - Increased market activity/interest will be (falsely) seen as recovery = false hope Bears - Volume of discounted properties flooding the market will increase the current high property-to-buyer ratio further, resulting in further lowering of prices as everybody competes for the same few buyers. = HPC continues I have just posted an article from today's Times on this very subject. Make sure you read it all, it ends with Taylor Wimpey operates from 337 outlets, having closed 49 since the end of the year, but the company is considering expansion. "If the current market stability is sustained into the autumn selling season we will look to increase the number of outlet openings during the second half of the year. While we remain cautious on land buying, opportunities are starting to emerge to purchase good-quality land at prices that should be value creating," it said. http://www.timesonline.co.uk/tol/global/article6534703.ece Edited June 19, 2009 by Tim Miller Quote Link to comment Share on other sites More sharing options...
OnlyMe Posted June 19, 2009 Share Posted June 19, 2009 The builders have a window to recoup the absurd prices they paid for land. If they don't do it some time the opportunity will be lost and they will be finished, they won't be able to service their loan books. This fake recovery is an opportunity not to be missed. Quote Link to comment Share on other sites More sharing options...
Timm Posted June 19, 2009 Share Posted June 19, 2009 I have just posted an article from today's Times on this very subject. Make sure you read it all, it ends with Taylor Wimpey operates from 337 outlets, having closed 49 since the end of the year, but the company is considering expansion. "If the current market stability is sustained into the autumn selling season we will look to increase the number of outlet openings during the second half of the year. While we remain cautious on land buying, opportunities are starting to emerge to purchase good-quality land at prices that should be value creating," it said. http://www.timesonline.co.uk/tol/global/article6534703.ece I was speaking to a representative of the Valuation Office the other week. He said selling prices for residential building land were down close to 50% from peak... Quote Link to comment Share on other sites More sharing options...
chkee Posted June 19, 2009 Author Share Posted June 19, 2009 I have just posted an article from today's Times on this very subject. Make sure you read it all, it ends with Taylor Wimpey operates from 337 outlets, having closed 49 since the end of the year, but the company is considering expansion.....http://www.timesonline.co.uk/tol/global/article6534703.ece Thanks. Interesting spin on 'expansion' by Taylor Wimpey - lets close 49 outlets and then say we are thinking of expanision, if we open just 1 we have expanded Quote Link to comment Share on other sites More sharing options...
Laura Posted June 19, 2009 Share Posted June 19, 2009 Prediction: Builders Will Soon Flood Housing Market, The thought of all those builder's bums floating down the streets is not a pleasant one Quote Link to comment Share on other sites More sharing options...
Tim Miller Posted June 19, 2009 Share Posted June 19, 2009 The thought of all those builder's bums floating down the streets is not a pleasant one Whilst on the subject of builders, I'll never forget going out with Tracy from Manchester for a few weeks. A truly lovely 23 year old girl, with more than ample chest and wit. As we walked passed a building site a builder wolf whistled and shouted out "Hey, fancy coming over hear and sitting on my face" and as quick as a flash she replied "Why, is your nose bigger than your dick"? I just cracked up! Quote Link to comment Share on other sites More sharing options...
PotNoodle Posted June 19, 2009 Share Posted June 19, 2009 The thought of all those builder's bums floating down the streets is not a pleasant one The rest of us were just thinking of the fiscal effects, Laura. Well done. Quote Link to comment Share on other sites More sharing options...
Neil B Posted June 19, 2009 Share Posted June 19, 2009 This is very interesting and I would tend to agree. During the last crash I worked in new housing construction and it was the developers who instigated the crash by selling their stock at prices significantly lower than surrounding owner properties. They have to do this: Building and then selling properties is their business; they cannot wait round for the market to recover. The reserves to cover people's wages run out. The supply chain needs to run again there are hundreds of thousands of people's jobs inlvolved in construction in the UK. Its not only the apparent construction labourers who are affected - back office staff, logistics, anyone involved in the supply chain of materials, utilites, councils etc. They sell off their existing stock and then start to build again so that they can re-employ their staff and get the cashflow moving. Then all the stubborn sellers sit and watch and weep when they wish that they had accepted that 'rediculously low offer' 6 months ago..... Get ready to grab a bargain new build..... Quote Link to comment Share on other sites More sharing options...
Sibley's Love Child Posted June 19, 2009 Share Posted June 19, 2009 This reminds me of the sorry-**** would-be-development on the New Kent Road SE1. 'Commencing 2007!' - bless. http://www.london-se1.co.uk/news/view/3641 Also, anecdotally, I notice that the Galliard Homes office on Westminster Bridge Road SE1 has shut up shop. Quote Link to comment Share on other sites More sharing options...
Jister1 Posted June 19, 2009 Share Posted June 19, 2009 Whilst on the subject of builders, I'll never forget going out with Tracy from Manchester for a few weeks. A truly lovely 23 year old girl, with more than ample chest and wit. As we walked passed a building site a builder wolf whistled and shouted out "Hey, fancy coming over hear and sitting on my face" and as quick as a flash she replied "Why, is your nose bigger than your dick"? I just cracked up! The guy obvioulsy thought you were a plum then and just homed right into the missus? Quote Link to comment Share on other sites More sharing options...
Tim Miller Posted June 19, 2009 Share Posted June 19, 2009 The guy obvioulsy thought you were a plum then and just homed right into the missus? If it makes you happy! Quote Link to comment Share on other sites More sharing options...
Stay Beautiful Posted June 19, 2009 Share Posted June 19, 2009 This reminds me of the sorry-**** would-be-development on the New Kent Road SE1. 'Commencing 2007!' - bless.http://www.london-se1.co.uk/news/view/3641 Also, anecdotally, I notice that the Galliard Homes office on Westminster Bridge Road SE1 has shut up shop. Looks like a Council High Rise. Quote Link to comment Share on other sites More sharing options...
blankster Posted June 19, 2009 Share Posted June 19, 2009 Taylor Wimpey said today that the bouyant state of the housing market means they could look forward to rising prices soon. Quote Link to comment Share on other sites More sharing options...
Laughing Gnome Posted June 19, 2009 Share Posted June 19, 2009 The guy obvioulsy thought you were a plum then and just homed right into the missus? Plum? As new to me as "redacted". Please explain. Quote Link to comment Share on other sites More sharing options...
wonderpup Posted June 19, 2009 Share Posted June 19, 2009 Taylor Wimpey said today that the bouyant state of the housing market means they could look forward to rising prices soon. Annnd- then they woke up. Quote Link to comment Share on other sites More sharing options...
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