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koala_bear

Persimmon And Barratt Moving Away From Ftb Homes To Larger More Expensive Ones

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Persimmon and Barratt moving away from FTB homes to larger more expensive ones.

Although new build is only 10-15% of the market at the moment, it seems like this could influence the prices seen in indices...

http://www.telegraph...rs-retreat.html

Mike Killoran, finance director, said the average selling price rose because the company, like its rivals, is switching away from developments aimed at first-time buyers.

Mr Killoran said about one in five of its homes are currently being bought by first-time buyers, compared to 30pc to 32pc before the financial crisis hit in 2007.

"We are selling more larger houses and at higher prices, as we are finding the proportion of customers who are first, second or third-time movers has increased," he said. "They have more equity to play with and the state of the mortgage market [for first-time buyers] has become more demanding."

Last week, rival Barratt Developments also warned that first-time buyers are going to find it much harder to get on to the property ladder because housebuilders are "moving away" from first-time buyers.

Edited by koala_bear

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It won't influence prices in indicies as new builds don't count at least not in the land registry as the use repeat sales regression.

As far as I know they aren't included in the lender indicies either, maybe in the asking price ones though

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I have often wondered if the low volumes of transactions we are seeing is the result of the people whose kids have fled the nest having got a shock in 2008 when prices fell deciding to realise some cash and downsizing so that the traditional chain including a first time buyer is not needed. The chain is basically all home owners, one downsizing the rest buying larger houses.

If it is the question is "is it sustainable?" and how long will it keep prices at the level they are. Also it frees up cash to be used as the bank of mum and dad from a generation that believes without question that property ownership is a good thing.

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Fab.

Cos the only people who will buy the movers homes will be FTB and they are rare as rockinghorse poop.

The PONZI always relies on people coming in at the bottom to move those at the top.

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The PONZI always relies on people coming in at the bottom to move those at the top.

Quite - so their moving to a "different" segment of the property market does them no good. Although it will mean houses should in theory be bigger with more land around them.

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It won't influence prices in indicies as new builds don't count at least not in the land registry as the use repeat sales regression.

As far as I know they aren't included in the lender indicies either, maybe in the asking price ones though

They are included in Halifax (though they exclude ex-LA homes) and I would have thought they would be included in DCLG and Nationwide too.

Edited by koala_bear

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I have often wondered if the low volumes of transactions we are seeing is the result of the people whose kids have fled the nest having got a shock in 2008 when prices fell deciding to realise some cash and downsizing so that the traditional chain including a first time buyer is not needed. The chain is basically all home owners, one downsizing the rest buying larger houses.

If it is the question is "is it sustainable?" and how long will it keep prices at the level they are. Also it frees up cash to be used as the bank of mum and dad from a generation that believes without question that property ownership is a good thing.

Long term obviously not, if you've got people dying off one end but no-one new coming in at the other.

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I have often wondered if the low volumes of transactions we are seeing is the result of the people whose kids have fled the nest having got a shock in 2008 when prices fell deciding to realise some cash and downsizing so that the traditional chain including a first time buyer is not needed. The chain is basically all home owners, one downsizing the rest buying larger houses.

If it is the question is "is it sustainable?" and how long will it keep prices at the level they are. Also it frees up cash to be used as the bank of mum and dad from a generation that believes without question that property ownership is a good thing.

i ) As I see it it was actually a little more complicated in action. There was certainly a lot of this going on in the London 'burbs pre crash (typically moving to Exeter etc.) and it has seemingly kept going at a lesser rate since the peak. There seem to be enough high earning (silly?) London FTBs to keep it going for the time being to eliminate the need for FTBs in areas outside London.

ii ) It could keep going at an ever decreasing rate for a while, but its effect will diminish. From comments in the London threads, there are signs that prices might be turning in certain london areas but it again this would seem to effect the bottom of the chains so we will have to wait for the Ponzi to collapse from the bottom which takes time

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The PONZI always relies on people coming in at the bottom to move those at the top.

Indeed. And this lot think they will just remove the bottom of the pyramid and all will be fine and dandy. :rolleyes:

Now they may of course be correct and we are all wrong. However if I were betting I would say their chances are slim to none.

They say the buyers they are now looking at have more equity ? Well fine but what about future buyers ? Where exactly is their equity going to come from if they can't start at the bottom like everyone else has ?

Logic fail. Short termism at its most blatant. Doomed to failure. IMO.

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i ) As I see it it was actually a little more complicated in action. There was certainly a lot of this going on in the London 'burbs pre crash (typically moving to Exeter etc.) and it has seemingly kept going at a lesser rate since the peak. There seem to be enough high earning (silly?) London FTBs to keep it going for the time being to eliminate the need for FTBs in areas outside London.

ii ) It could keep going at an ever decreasing rate for a while, but its effect will diminish. From comments in the London threads, there are signs that prices might be turning in certain london areas but it again this would seem to effect the bottom of the chains so we will have to wait for the Ponzi to collapse from the bottom which takes time

Interesting. Also I think in London there is also a lot of non traditional FTB's as well. Rich foreigners are distorting the market aided by the weak pound, but again for how long.

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Is there no higher authority granting planning permission and ensuring the right mix of houses is built?

Actually, come to think of it, hasn't the govt removed house building targets so `nice' areas can concentrate on building `nice' houses for `nice' people.

Are there still rule about developers having a proportion of `affordable' houses or HA houses in every development? Can't see your average cul de sac of exec 5 bed houses sitting comfortably with a row of small semis and terraces inhabited by people on HB.

Y

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Is there no higher authority granting planning permission and ensuring the right mix of houses is built?

Actually, come to think of it, hasn't the govt removed house building targets so `nice' areas can concentrate on building `nice' houses for `nice' people.

Are there still rule about developers having a proportion of `affordable' houses or HA houses in every development? Can't see your average cul de sac of exec 5 bed houses sitting comfortably with a row of small semis and terraces inhabited by people on HB.

Y

Well you would think that wouldn't you. :(

You have been riding the wave for the last 10 years and now want to stop building FTB places coz it doesn't suit you ? Well no sorry - we are the Government and we know we need these houses so build them as we say so. What ? You dont want to as it will mean prices come down and you will go bust ?

Well cest la vie. That is what is supposed to happen. Your land/supplies will be auctioned off and a new housebuilder can come along and build the same places - but afford to sell for much cheaper. Everyone is a winner.

If only.

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This isn't new news, I mentioned it a while back. Investors think this will get the builders through the recent slump.

With the lack of finance available to FTB to buy over priced house`s it`s the only option for them ,but looking at the local market I can see why they are choosing to do it ,The top to middle of the market is holding up in the way of price but the bottom end is falling quite quickly and there is a rapidly increasing price gap between the to ends of the market ,the question is what part of the market is going to move to narrow that gap I can`t see the bottom going up so sooner or later the top will have to come down

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Is there no higher authority granting planning permission and ensuring the right mix of houses is built?

Actually, come to think of it, hasn't the govt removed house building targets so `nice' areas can concentrate on building `nice' houses for `nice' people.

Are there still rule about developers having a proportion of `affordable' houses or HA houses in every development? Can't see your average cul de sac of exec 5 bed houses sitting comfortably with a row of small semis and terraces inhabited by people on HB.

Y

No, they don't mix private and social housing (in the same street). What they do is build a 'social housing' estate first and then directly next to it "over the wall" build a private estate.

I know, because the little semi I live in backs onto 2 huge social houses with gardens the size of football fields (and somehow the kid over the back still manages to punt his football into my back garden).

I believe for all this Governments meandering that they still have to build a proportion of social houses before they build private ones.

Where I live the authorities have just put through new housing to be built, but a certain proportion has to be social. Whether or not they are FTB houses is irrelevant and is purely at the deposition of the builder, at max on most estates you will get 5-10 FTB houses, the rest will be retirement flats or large houses.

Edited by retz

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Correction: Persimmon and Barrats announce they are to stop building overpriced 'affordable' rabbit hutches, and instead concentrate on building homes instead.

Looking at the hbos data you can see that the existing houses prices have been coming down at a reasonable rate but the indeces are being kept higher by sales of new builds. They have stopped reporting them, but is easily inferred by looking at the non new builds and the headline figure. Ftb's are being sucked in to buy there over priced boxes by heavy handed sales tactics combined with gimmics which hide the true cost/ value of the places. We came across said tactics while looking recently as the sales agent tried to pressurize a young couple with the lure of the home buyerdirect scheme. Base prices were at least 15% above normal asking prices.

This is good news. What they build now and call affordable homes are not fit for purpose.

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Correction: Persimmon and Barrats announce they are to stop building overpriced 'affordable' rabbit hutches, and instead concentrate on building homes instead. have run out of FTBers to milk, and are now moving onto those with equity and any chance of getting finance.

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      • down 5% +
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