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Realistbear

Barratt Sales Down 4.4%--Because Loans Are Hard To Get

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http://uk.finance.yahoo.com/news/Barratt-says-lack-mortgages-reuters_molt-2643860833.html?x=0

Barratt says lack of mortgages still key constraint
Lorraine "Lorri" Turner, 10:29, Wednesday 12 January 2011
LONDON (
Reuters
) - Housebuilder Barratt Developments reported a 4.4 percent fall in first-half completions, partly offset by higher prices and margins, and said low mortgage availability remained its biggest problem.
"Last year's Autumn selling season was particularly bad. Therefore, it is important we get ourselves going as fast as we can with those sales in the next selling season," chief executive Mark Clare told reporters on Wednesday.
"Mortgage lending remains at unusually low levels and we view this
restricted availability of mortgage finance as continuing to be the key constraint on market growth
in the near term," the company said.

They just don't get it do they?

Lower the prices and the LTVs drop and banks will start lending. What part of "lower the prices" do they not understand?

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Of course, I beleive the Homebuy for newbuilds are all finished now.

sales would have been down ages ago without government interference yet again.

And for every large mortgage they supported, the greater the expenditure on SMI in the longer run.

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Barrett development near me built 3 years ago now asking £150k for 3 bed flat. Used to be £179k. Doesn't look like many are oucupied either. And phase 2 just hit the Market across the road too. Although currently it's just a fenced off wasteland.

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Yep, they definitely don't get it.

Availability of credit is a function of risk, risk is a function of the mortgage principal. Availability of credit can be boosted by prices falling. Transactions are stagnating because the supplier believe the shortage of demand is only temporary. Demand is still up literally infinitely high levels at prices lower that average of the few transaction values that are occurring.

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Yep, they definitely don't get it.

Availability of credit is a function of risk, risk is a function of the mortgage principal. Availability of credit can be boosted by prices falling. Transactions are stagnating because the supplier believe the shortage of demand is only temporary. Demand is still up literally infinitely high levels at prices lower that average of the few transaction values that are occurring.

Equally, I think they would never, ever admit prices are too high. It would expose them and possibly kill them off.

They are those who paid over the odds for the landbanks.

I hope all the main builders go bust so that a new type of small building company can flourish. At least it would add variety to the housing landscape. the UK looks like a copy-paste job with all these crap developments

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Equally, I think they would never, ever admit prices are too high. It would expose them and possibly kill them off.

They are those who paid over the odds for the landbanks.

I hope all the main builders go bust so that a new type of small building company can flourish. At least it would add variety to the housing landscape. the UK looks like a copy-paste job with all these crap developments

+1 I'd like to see some nice variety and something that will still be standing in 200 or 300 years. Not something that will be fall down and be rebuilt in 50 years.

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Equally, I think they would never, ever admit prices are too high. It would expose them and possibly kill them off.

They are those who paid over the odds for the landbanks.

I hope all the main builders go bust so that a new type of small building company can flourish. At least it would add variety to the housing landscape. the UK looks like a copy-paste job with all these crap developments

with sales at 96%, then maybe prices are just a tad too high.....course, things are going to get harder...the holidays are over after all.

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Equally, I think they would never, ever admit prices are too high. It would expose them and possibly kill them off.

Agreed but a trigger could be others elsewhere who admit prices are too high and get away with a moderate loss.

There will be people who bought, not at the peak, but on the way up where their real losses will be modest. They are holding on to their virtual gains.

As soon as that starts creeping in then they'll simply do what the guy in the latest movie 127 Hours did...not want to be killed off and accept a big loss through no other choice, cut your trapped arm off with a pen knife.

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Hasn't really hurt their share price.

there seems to be the beginnings of a bubble in small caps stocks at the moment

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snip

They are holding on to their virtual gains.

snip

How do they do that..do they have control?

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How do they do that..do they have control?

By not selling yet. I expect there will be pressures in 2011 pushing people to sell (flat investments etc.)

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By not selling yet. I expect there will be pressures in 2011 pushing people to sell (flat investments etc.)

run that by me again please?

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run that by me again please?

I've clearly said something ridiculous here, right?

House transactions are usually a pretty normal occurrence. People move around with jobs, buy investments, sell investments, die, inherit, lose their job. If I bought early-boom I would have been excited by the 2007 peak. If I was now looking at selling for whatever reason I might think like a lot of people do and just wait until they go back up to peak. Isn't that the source of some of the lack of supply after the smallish fall from peak? If I finally accept they aren't going anywhere near the peak again for some time I might actually sell at substantially less than peak but more than I paid. Others who bought later in the boom may want to cut their losses as these people are driving down prices and actually accept a loss.

Edited by cica

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Why do they just not get it!

We had an enormous credit bubble where the banks would lend lots of money with little risk checks.

That is stopping and we are now returning to normal.

Even if I was a VI I would realise that I had had a good run and that I had to move my prices accordingly.

Availability and amount of loans dictate prices, not the other way around!

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I've clearly said something ridiculous here, right?

House transactions are usually a pretty normal occurrence. People move around with jobs, buy investments, sell investments, die, inherit, lose their job. If I bought early-boom I would have been excited by the 2007 peak. If I was now looking at selling for whatever reason I might think like a lot of people do and just wait until they go back up to peak. Isn't that the source of some of the lack of supply after the smallish fall from peak? If I finally accept they aren't going anywhere near the peak again for some time I might actually sell at substantially less than peak but more than I paid. Others who bought later in the boom may want to cut their losses as these people are driving down prices and actually accept a loss.

you said the late purchasers were holding on to their gains.

I asked if they had any control over this.

Just what control do THEY have over the price they can obtain....are all these guys linked into a network of holders?...or are they all individuals withno control and going with the flow.

Its buyers that determine the market...IMHO

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you said the late purchasers were holding on to their gains.

I asked if they had any control over this.

Just what control do THEY have over the price they can obtain....are all these guys linked into a network of holders?...or are they all individuals withno control and going with the flow.

Its buyers that determine the market...IMHO

They can delay when they accept their loss...as I understand it that's what is party what is happening now but it can't go on forever.

I said their virtual gains not anything real. They still think houses are worth peak prices. They think they are holding on and simply riding through this temporary lull. Guy in my office claimed this just yesterday.

There's definitely is an element of sellers stalling things waiting for the good times that I don't think will come.

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http://uk.finance.yahoo.com/news/Barratt-says-lack-mortgages-reuters_molt-2643860833.html?x=0

Barratt says lack of mortgages still key constraint
Lorraine "Lorri" Turner, 10:29, Wednesday 12 January 2011
LONDON (
Reuters
) - Housebuilder Barratt Developments reported a 4.4 percent fall in first-half completions, partly offset by higher prices and margins, and said low mortgage availability remained its biggest problem.
"Last year's Autumn selling season was particularly bad. Therefore, it is important we get ourselves going as fast as we can with those sales in the next selling season," chief executive Mark Clare told reporters on Wednesday.
"Mortgage lending remains at unusually low levels and we view this
restricted availability of mortgage finance as continuing to be the key constraint on market growth
in the near term," the company said.

They just don't get it do they?

Lower the prices and the LTVs drop and banks will start lending. What part of "lower the prices" do they not understand?

Selective quoting going on there i think. The full report reads quite well for BDEV compared to what they were facing this time two years ago.

(RTTNews) - Home builder and residential property developer Barratt Developments Plc (BDEV.L: News ) Wednesday reported that its total revenues for the first half slightly increased from last year, as lower completion volumes were more than offset by higher average selling price.

In its trading update for the six months to December 31, the company said it generated group revenues of about GBP 875 million, compared to last year's GBP 872.4 million.

Total completions, comprising housebuilding completions plus completions from joint ventures, were 4,832 units, lower than 5,053 units a year ago. Private completions fell from the previous year, while social housing and joint venture completions recorded a growth.

The company operated from an average of 352 active sites, down from 368 in the prior year. It opened 79 active sites and closed 52 active sites, resulting in a net increase in active sites to 366 as of December 31.

The cancellation rate for the first half was 20.1%, higher than 17.8% in the prior year.

Average selling price or ASP for the period grew about 6% to GBP 176 thousand, driven by changes in mix, with houses representing 65% of completions, compared to 60% last year. Private ASP grew 11%, and social ASP rose 4%. Meanwhile, underlying selling prices remained stable.

Six-month operating profit grew significantly, with operating margin, before exceptional items, increasing to around 5% from last year's 2.4%.

The company noted that the net finance charge for the first half would be around GBP 50 million

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I've clearly said something ridiculous here, right?

House transactions are usually a pretty normal occurrence. People move around with jobs, buy investments, sell investments, die, inherit, lose their job. If I bought early-boom I would have been excited by the 2007 peak. If I was now looking at selling for whatever reason I might think like a lot of people do and just wait until they go back up to peak. Isn't that the source of some of the lack of supply after the smallish fall from peak? If I finally accept they aren't going anywhere near the peak again for some time I might actually sell at substantially less than peak but more than I paid. Others who bought later in the boom may want to cut their losses as these people are driving down prices and actually accept a loss.

What lack of supply? There is currently an over supply or glut in most areas.

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Selective quoting going on there i think. The full report reads quite well for BDEV compared to what they were facing this time two years ago.

(RTTNews) - Home builder and residential property developer Barratt Developments Plc (BDEV.L: News ) Wednesday reported that its total revenues for the first half slightly increased from last year, as lower completion volumes were more than offset by higher average selling price.

In its trading update for the six months to December 31, the company said it generated group revenues of about GBP 875 million, compared to last year's GBP 872.4 million.

Total completions, comprising housebuilding completions plus completions from joint ventures, were 4,832 units, lower than 5,053 units a year ago. Private completions fell from the previous year, while social housing and joint venture completions recorded a growth.

The company operated from an average of 352 active sites, down from 368 in the prior year. It opened 79 active sites and closed 52 active sites, resulting in a net increase in active sites to 366 as of December 31.

The cancellation rate for the first half was 20.1%, higher than 17.8% in the prior year.

Average selling price or ASP for the period grew about 6% to GBP 176 thousand, driven by changes in mix, with houses representing 65% of completions, compared to 60% last year. Private ASP grew 11%, and social ASP rose 4%. Meanwhile, underlying selling prices remained stable.

Six-month operating profit grew significantly, with operating margin, before exceptional items, increasing to around 5% from last year's 2.4%.

The company noted that the net finance charge for the first half would be around GBP 50 million

Perhaps why the shares are holding up?

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http://uk.finance.yahoo.com/news/Barratt-says-lack-mortgages-reuters_molt-2643860833.html?x=0

Barratt says lack of mortgages still key constraint
Lorraine "Lorri" Turner, 10:29, Wednesday 12 January 2011
LONDON (
Reuters
) - Housebuilder Barratt Developments reported a 4.4 percent fall in first-half completions, partly offset by higher prices and margins, and said low mortgage availability remained its biggest problem.
"Last year's Autumn selling season was particularly bad. Therefore, it is important we get ourselves going as fast as we can with those sales in the next selling season," chief executive Mark Clare told reporters on Wednesday.
"Mortgage lending remains at unusually low levels and we view this
restricted availability of mortgage finance as continuing to be the key constraint on market growth
in the near term," the company said.

They just don't get it do they?

Lower the prices and the LTVs drop and banks will start lending. What part of "lower the prices" do they not understand?

H'm, I'm inclined to think they get it perfectly well. Would you really expect them to say that: *our prices are high and not at all good value but we don't particularly care"? Blame it on to someone else - perfectly rational.

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What lack of supply? There is currently an over supply or glut in most areas.

As I understand it transactions are low right now. I mean a lack of supply at prices that people are willing/able to pay which is why the falls (good news) are modest (at the moment) and transactions are low.

Edited by cica

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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