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Bland Unsight

Standard: Thousands Of Unwanted New Builds To Be Dumped On Market

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Thousands of unwanted newly built apartments are set to be dumped on the London market from next year as fed-up investors turn their backs on the capital, research warns today.

As many as 60,000 homes bought off-plan in new developments in areas such as Nine Elms are scheduled for completion by the end of 2017 and many will be put up for sale immediately because of the growing disillusion with London, it says.

Source article

Pure madness, haven't they heard from the Poverty11Later guys about all the immigration and the stampede of 'big boys' looking to hoover up property? Why not keep it, let it and put the rent up and up till you're minting it. Somebody should write a letter to the Evening Standard right this minute!

Edit: h/t to TPFX on the twitters, following @standardnews so we don't have to!

Edited by Bland Unsight

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All these flats will be the high-rise slums of the future. Tiny poorly built flats selling for dirt cheap.

Will be great to see a lot of BTL's get ruined, and the stupid FTB paying silly money for tiny unsuitable flats helping drive the market up.

I know plenty of people who have easy lives getting gifted deposits to spunk up the walls on London flats. always everything magically working out for them. welcome to a life of negative equity and ruined financial futures.

I guess there is some justice in the world after all! feel my crushed soul starting to come alive again :)

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Slums of the future!

These new build apartments seem awfully planned. Mate rents one. No balcony. Whole place is damp because they dont want to pay to tumble-dryer their clothes (plus, its a fair walk anyway) and its not theirs, so why worry.

These places will be ripped down again within 20 years.

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Excellent news.

Hopefully there'll be plenty of the commie bankers, similar corporates and politicians etc etc hoping to flip at a profit making massive losses.

Edited by billybong

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I've been pointing out the likes of Berkeley homes for some time. There are 2 distinct problems and actually touched on in the article:

1. Off plan Overseas buyers, supposedly for cash, in devaluing currencies 'suffering' (higher) taxes. Seeking to flip.

2. An incredible glut of £1m plus property for which there is no precedence and no fundamental market.

The question is, have the developers booked profits on the back of off plan sales and who picks up these properties should the buyers back out?

SHORT

Berkeley talk of 'cash due on forward sales', now 3 Bn quid at latest interims. Presume deposits are paid and then the balance on completion. I guess the crunch comes when the balance is due, how do you flip if you are unable to complete the sale? 50-60% of offplan sales go to foreign buyers.

Berkeley have no leverage whatsoever, guess you don't get high on your own supply!

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Perhaps London councils can buy them up cheaply to use as social housing :lol:?

2007-9 the local Ha`s did exactly that in Cardiff (the ones that meet their standards ) exclusive gated communities became social housing

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Source article

Pure madness, haven't they heard from the Poverty11Later guys about all the immigration and the stampede of 'big boys' looking to hoover up property? Why not keep it, let it and put the rent up and up till you're minting it. Somebody should write a letter to the Evening Standard right this minute!

Edit: h/t to TPFX on the twitters, following @standardnews so we don't have to!

Maan what are you talking about? This signals more opportunity for investors in BTL; guys on Property118 and co; Y'know the clever entrepreneurs. They'll be celebrating, esp one particular person:

hvr53pN.gif

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I should add, head of rightmove lettings was on the beeb with what looked to be black/bruised eye. Fitting metaphor, but he was predicting big rise in price before stamp duty changes come in. He still thinks prices will rise at the end of next year compared to this years autumn prices but stories like this are sweet.

Credit to the guys on "Prime London is Crashing" thread that told me about this and what was happening at Nine Elms/Battersea a few months before.

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Watching Apprentice the other week, filmed earlier this year, buyers were pushing and falling over themselves to pay high prices to whole load of newbuild developers.

Madness. Quick look around and handshaking and signing contracts on super high priced property.

Anyway I'll leave it to others to go into breakdown-mode for these buyers into HPC.

~ Can I get 1% off the price?

~ No.

~ At least I can say I tried.

Can't see any end to it myself

The Big Ponzi Scam, "Fantasy Wealth" Bribe the electorate with prosperity that doesn't exist, sleight of hand, shell game just rolls on and on and there's no shortage of guillable idiots who will continue to buy into the myth that perpetual debt slavery will make them rich

When they're paying these prices, in this market, there are no innocents.



Hmm; Osborne is coming in for some stick for some serious measures brought on the market. According to some here, he's nothing but a weakling and a fool, and only in position to protect Blair's HPI portfolio. Universal wrongs of greed need HPC. And very few sellers get out of a bubble at 90% peak value. The vast majority of those 'invested' get hit all the way down. Markets move at the margin. Osborne's measures might be forcing some 'selfish acts' of selling, with prices having reached treble-bubble high, from this point, at the margin.

Does anyone remember the buyers in 2008-10 trying to pull out of deals with a major London developer. I do. Their T-shirts and protest group, and frowny faces. Can remember one pic of them gathered around a cannon monument - was it outside Highbury? 'We don't want to pay.' / 'We can't get mortgages any longer.' - whine whine whine.

Specific performance, fools. Why am I having to post the same thing 6-7 years later, with HPC prevention, and after market mega bailout reflation HPI++++ mega fest? So many on side of buyers who the excuse-givers told me, 'They didn't know what they were doing'. Specific performance.

Edited by Venger

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All these flats will be the high-rise slums of the future. Tiny poorly built flats selling for dirt cheap.

Will be great to see a lot of BTL's get ruined, and the stupid FTB paying silly money for tiny unsuitable flats helping drive the market up.

I know plenty of people who have easy lives getting gifted deposits to spunk up the walls on London flats. always everything magically working out for them. welcome to a life of negative equity and ruined financial futures.

I guess there is some justice in the world after all! feel my crushed soul starting to come alive again :)

I would love it, simply love it, if councils which are selling off land to "Build" new social housing, instead, buy these one day for less then it would cost to build the things themselves.

That would be hilarious for a hippy socialist like myself. The Olvias and Oscars with trust funds and new familys having to mix with the cleaners and builders they patronize who they often work with but don't even acknowledge the existence of.

,

I've seen how the people on the carpenters estate round Stratford have been treated and how disingenuous the proposals for say the Aylesbury estate near Elelphant and Castle, have been. This would be crackin.

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Berkeley talk of 'cash due on forward sales', now 3 Bn quid at latest interims. Presume deposits are paid and then the balance on completion. I guess the crunch comes when the balance is due, how do you flip if you are unable to complete the sale? 50-60% of offplan sales go to foreign buyers.

Berkeley have no leverage whatsoever, guess you don't get high on your own supply!

Pidgely and Perrins are no one's fools.

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Watching Apprentice the other week, filmed earlier this year, buyers were pushing and falling over themselves to pay high prices to whole load of newbuild developers.

Hmm; Osborne is coming in for some stick for some serious measures brought on the market. According to some here, he's nothing but a weakling and a fool, and only in position to protect Blair's HPI portfolio. Universal wrongs of greed need HPC. And very few sellers get out of a bubble at 90% peak value. The vast majority of those 'invested' get hit all the way down. Markets move at the margin. Osborne's measures might be forcing some 'selfish acts' of selling, with prices having reached treble-bubble high, from this point, at the margin.

Does anyone remember the buyers in 2008-10 trying to pull out of deals with a major London developer. I do. Their T-shirts and protest group, and frowny faces. Can remember one pic of them gathered around a cannon monument - was it outside Highbury? 'We don't want to pay.' / 'We can't get mortgages any longer.' - whine whine whine.

Specific performance, fools. Why am I having to post the same thing 6-7 years later, with HPC prevention, and after market mega bailout reflation HPI++++ mega fest? So many on side of buyers who the excuse-givers told me, 'They didn't know what they were doing'. Specific performance.

I saw that apprentice episode. My sister was shocked that people would pay that much for so little! Crazy.

Reeks of Inheritance money, divorce money or "Over leveraged Entrepreneurs."

-

Did that really happen? That sounds hilarious. Please tell me forlorn faces were profiled in stories in The Express Telegraph and Daily Mail too?

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Berkeley talk of 'cash due on forward sales', now 3 Bn quid at latest interims. Presume deposits are paid and then the balance on completion. I guess the crunch comes when the balance is due, how do you flip if you are unable to complete the sale? 50-60% of offplan sales go to foreign buyers.

Berkeley have no leverage whatsoever, guess you don't get high on your own supply!

Am I right in thinking that £3.1bn of cash due on forward sales is balanced against roughly £2.4bn in inventory?

From their October report Berkeley says it has £2,375.5 million of work in progress (30 April 2015: £2,280.2 million) and £18.7 million of completed stock (30 April 2015: £31.9 million).

And it says its cancellation rate is currently around 10% compared to historic levels of 15% to 20%. So imagine cancellations go to 20% in HPC that puts it at break-even or worse. But like you say its balance sheet is strong with no debt ... yet.

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I saw that apprentice episode. My sister was shocked that people would pay that much for so little! Crazy.

Reeks of Inheritance money, divorce money or "Over leveraged Entrepreneurs."

-

Did that really happen? That sounds hilarious. Please tell me forlorn faces were profiled in stories in The Express Telegraph and Daily Mail too?

I saw the RM guy today on TV as well; head of lettings, as I recall it, and thought the same. Having looked at his profile pics it appears to be a.. trying not to offend.. imperfection he can't do anything about, so not an issue for further discussion.

Yes it did, with a few developers. That one being quite high profile, because of their T-shirt protest, website and narking on they were innocents (from my pov). In a while I'll have a look to see if the pic/story is still accessible.

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the studios at battersea started at £440,000 in 2013; the developers, were making decent profits at that level.

studios peaked at £750,000 on resale

now ​asking price is £550,000

developers will only really suffer if those reserving do not pony up the purchase monies

the previous site described above was IIRC, in Greenwich (Royal Arsenal), where the purchasers were destined for immediate negative equity​ ​

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It will be interesting to see how it plays out if the expected cash fails to materialise in the expected quantity.

Am I right in thinking that Berkeley's £3.1bn of cash due on forward sales is balanced against roughly £2.4bn in inventory?

From its 31 October interim results announcement Berkeley says it has £2,375.5 million of work in progress (30 April 2015: £2,280.2 million) and £18.7 million of completed stock (30 April 2015: £31.9 million).

It says its cancellation rate is currently around 10% compared to historic levels of 15% to 20%. So imagine cancellations go to 20% in HPC it still just avoids losses. And like you say its balance sheet is strong with no debt (yet) - probably stronger than other developers.

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It will be interesting to see how it plays out if the expected cash fails to materialise in the expected quantity.

They will sue the contracted buyers for the full amount. It has, as quoted above, happened before. Berkeley will use any fall in prices to increase their land bank.

Both of the above named are actually quite frugal and cautious. They will be fine no matter what happens.

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I saw the RM guy today on TV as well; head of lettings, as I recall it, and thought the same. Having looked at his profile pics it appears to be a.. trying not to offend.. imperfection he can't do anything about, so not an issue for further discussion.

Yes it did, with a few developers. That one being quite high profile, because of their T-shirt protest, website and narking on they were innocents (from my pov). In a while I'll have a look to see if the pic/story is still accessible.

I feel bad now. Yeah, he's only head of lettings I don't think he's a lettings agent, so fair enough.

-

T-Shirt protest? Once things bite some entrepreneurs won't even have that; They'll be left with the Emperors New Clothes. Imagine Mark marching through pall mall...

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I feel bad now. Yeah, he's only head of lettings I don't think he's a lettings agent, so fair enough.

-

T-Shirt protest? Once things bite some entrepreneurs won't even have that; They'll be left with the Emperors New Clothes. Imagine Mark marching through pall mall...

Don't do; I so very nearly made same comment earlier today - it was what I was thinking.

And besides, he was pushing the big old HPI for next year; happy-happy. Some 6-7%++++ for 2016.

I'll try and find that article from 2008-09 protest group. Specific performance. There's no pulling out of these contracts.

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Am I right in thinking that Berkeley's £3.1bn of cash due on forward sales is balanced against roughly £2.4bn in inventory?

From its 31 October interim results announcement Berkeley says it has £2,375.5 million of work in progress (30 April 2015: £2,280.2 million) and £18.7 million of completed stock (30 April 2015: £31.9 million).

It says its cancellation rate is currently around 10% compared to historic levels of 15% to 20%. So imagine cancellations go to 20% in HPC it still just avoids losses. And like you say its balance sheet is strong with no debt (yet) - probably stronger than other developers.

Have not read in detail so cannot comment about how the future cash is utilised in the accounts.

The completed stock is some 38 units, which gives an idea of the number of units under construction, looks like a factor of over 100 which may be over 4,000 units.

And this is reportedly one fifteenth of what is under construction at present!

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They will sue the contracted buyers for the full amount. It has, as quoted above, happened before. Berkeley will use any fall in prices to increase their land bank.

Both of the above named are actually quite frugal and cautious. They will be fine no matter what happens.

I suppose the question is how effective inter-continental litigation against speculators without the assets to cover the balance will turn out to be. Got to be a risk, whatever the qualities of the individuals involved. Unless they have been cautious about accepting overseas buyers(I have no reason to suppose they have not been).

This is sort of what HPC is about really- malinvestment which ultimately damages or threatens to damage prospects for well run businesses and households. Could see highly leveraged outfits go to the wall, stock sold cheaply, what does the sustainable business do now?

I see some parallels with Borders Books or a recent bust make work tat retailer on Ebay- enterprises which damaged sustainable competitors.

Edited by The Knimbies who say No

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I suppose the question is how effective inter-continental litigation against speculators without the assets to cover the balance will turn out to be.

That is a good question but assumes the contracted parties are first time buyers with no other UK Based assets. As I suggested before, I would be surprised if they have not foreseen and planned for this eventuality.

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I suppose the question is how effective inter-continental litigation against speculators without the assets to cover the balance will turn out to be.

Yes; that's a new dimension. After 2008-09, you would have thought the developers would have got them in tight, and not able to pull out with 'Buyers-Regret'.

No innocents at these prices. Another development... happy-happy buyers pushing and falling over each other. 'Heard it on radio - we jumped straight in the car to be first in queue'. 'Bought one each for my two daughters'. Talking towards £1m. They made their own decisions, with parents who have had a life of HPI.

2009. We had a thread. I think it had droned on for quite some time by this point.

ilzpcg.jpg

http://www.theguardian.com/money/2009/aug/08/berkeley-homes-mortgage-deposit

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