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bendy

Disproportionality Land And Buildings

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Why is it that homes at the cheaper end of the market seem to have a disproportionate price tag in terms of square footage compared to bigger/mansion types?

If it's the buildings that are being paid for this would seem quite fair as the bigger plot would have the bigger house, as well as outbuildings etc. However, it is always spoke of that it's the land that is the value part of the transaction leaving the buildings as little in form of the overall percentage of cost. Or is it the fixation with property in la la land here along with all the bureaucracy that drives the bigger home as being 'worth' far more in terms of the grounds it demands over the smaller home?

I guess it applies to pretty much anything in that if you buy in bulk, you expect more overall for that extra cash, though as we know, housing is not by any means a normal market!

:unsure:

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Partly about how earnings multiples/deposits work, creating a price floor at the level of households that can even afford to borrow that's relatively higher on smaller places than would otherwise be. And partly to do with scale - most bigger plots don't have the permissions to split into 2 separate homes. The (primarily) land value relates to what can be done with it rather than what could.

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Yes didn't think of the earnings/debt(mortgage) ratios creating a price floor. A further perk for TPTB to not only regulate the monetary system to their own ends, enslaving them at the bottom while getting more bang for their buck at the top end.

That should've been blindingly obvious TBH!

:(

Edited by bendy

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Why is it that homes at the cheaper end of the market seem to have a disproportionate price tag in terms of square footage compared to bigger/mansion types?

If it's the buildings that are being paid for this would seem quite fair as the bigger plot would have the bigger house, as well as outbuildings etc. However, it is always spoke of that it's the land that is the value part of the transaction leaving the buildings as little in form of the overall percentage of cost. Or is it the fixation with property in la la land here along with all the bureaucracy that drives the bigger home as being 'worth' far more in terms of the grounds it demands over the smaller home?

I guess it applies to pretty much anything in that if you buy in bulk, you expect more overall for that extra cash, though as we know, housing is not by any means a normal market!

:unsure:

I would say is mainly demand driven. The most demand is at the bottom end of the market from regular people and BTL investors who couldn't not consider offering on mansion type properties leaving just a few wealthy left to chose from a vast selection of such houses.

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Yes didn't think of the earnings/debt(mortgage) ratios creating a price floor. A further perk for TPTB to not only regulate the monetary system to their own ends, enslaving them at the bottom while getting more bang for their buck at the top end.

That should've been blindingly obvious TBH!

:(

I didn't think of BTL, as Wurzel points out. The whole thing is a scam for most, and the cherry on the turd is our having to fund the whole thing though work.

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Don't forget the wheezes to "help" "affordability" eg HTB etc which affect the lower end of the market and have the unintended effect of helping to push up prices at the bottom.

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All the spivs are at the lower end, so the churn is high. A large shoal attracts even more predators and the market works itself into a frenzy. So every drop of FTB blood is shed in this market.

Blood = £

Higher up, if you already live in a house earning you £20,000 per year you aren't so keen to be ripped off. Less churn, smaller market = less chancers trying to earn a quick buck.

What set the average price? is it £100,000 houses now costing £200,000 or £1,000,000 houses costing £2,000,000? I don't know....

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