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City AM: House building is grinding to a halt in central London as house prices drop

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In that case govt should be developer of last resort, i think rk said this and it's spot on.

 

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Or perhaps we should revisit whether we actually need all these new properties or whether the real issue is price not lack of supply.

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Indeed. Who would buy in an uncertain market that's starting to fall? For the first time in years buyers have every reason to wait and see. And that's how market sentiment turns the tables. Hopefully.

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47 minutes ago, Smith said:

Or perhaps we should revisit whether we actually need all these new properties or whether the real issue is price not lack of supply.

We need them so we can flog them to wealthy foreigners to bring in the money. So it's not so much the properties we need, more then cash. 

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2 hours ago, Smith said:

Lovely article, thanks - v good comment at the bottom of it, thought praps from someone on here...

"tricky decisions' over whether to start building, slow building , put off sales launches or offer discounts … they did not have a problem putting up prices..did not give a thought on the impact on ordinary people's lives…did not batter an eyelid whether we got into mountains of debt and lives in cramped circumstances"

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1 hour ago, hotairmail said:

Interesting that there is now a record number of high rises in the planning pipeline according to the FT today....must be the post Brexit feel good factor ;)

https://www.ft.com/content/7b80879c-155a-11e7-b0c1-37e417ee6c76

 

 
Goes on to say a record 26 tall buildings (> 20 stories) were completed in 2016. 24 of them were residential.

The post Brexit feel good factor. Yes, that's the explanation.

 

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Irrespective of whether the problem is house prices (it is the main problem) or the amount of new homes being built the government has a declared new homes target to meet - 1 million new homes by the 2020 general election.  That means building about 240,000 new homes a year for the next 3 years.  

So they have to increase the current rate of building not allow the rate to drop.  

The idea of the government being the builder of last resort has a lot going for it especially for those sites which already have planning approval and for which the building and infrastructure designs and plans have already been approved.  If they have the will the government could easily just step in and arrange contracts to complete the work.  If necessary delegate the government's role in the management and supervision and use overseas contractors. 

Edited by billybong

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3 hours ago, Smith said:

Indeed. Who would buy in an uncertain market that's starting to fall? For the first time in years buyers have every reason to wait and see. And that's how market sentiment turns the tables. Hopefully.

This ^. Why do people buy homes in London. The bulk are;

  • Foreign investors buy to make money from capital gains and many have lost quite a bit with the fall of the pound (anyone who bought before Brexit). There have also been quite a few changes to taxes that affect foreign buyers such as Inheritance tax, stamp duty, ATED, CGT in the last few years which makes buying (London) property less attractive.
  • BTLers are the other bulk buyers. They have been put off by falling prices since Brexit, S24, SDLT for second homes and general hostility towards them from the Government. Add to that the real possibility of reduced numbers of people coming from the EU to pay their mortgages and pensions rent.
  • The ones who are left are rich Londoners who will pay whatever because HPI innit.
  • Plus the stock market has gone up a lot in the past few years, so many some of these savvy buyers see that as the new get rich quick investment?

 

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Hi first time on the site...I picked up a thread from 'saving for a spaceship yesterday. I live in north Northumberland and I'm trying hard to find a site to either build a flat pack or

put my present home on it.  I live in a mobile home. Talking of house prices though, here we have builders putting up 'executive' housing for those 'down south' (Newcastle to you)

can come in and buy.  That leaves those of us who are struggling to find small good value property.  I would love to rent land but no one here seems keen. all waiting for the mega bucks to come along.  It is refreshing to hear that London prices are falling......so people do have power ??

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2 hours ago, North London Rent Girl said:

Lovely article, thanks - v good comment at the bottom of it, thought praps from someone on here...

"tricky decisions' over whether to start building, slow building , put off sales launches or offer discounts … they did not have a problem putting up prices..did not give a thought on the impact on ordinary people's lives…did not batter an eyelid whether we got into mountains of debt and lives in cramped circumstances"

:rolleyes:  It's just F^CKING UNBELIEVABLE why these articles don't talk about the Elephant Mammoth in the Room....   House "prices" are F&CKING STUPID.....   F*CKING STUPID.......

"Prices" need to come down 70%  for us to return to ANY semblance of normality and rationality.........  WHY NOT JUST F$CKING ADMIT THIS YOU F%CKING MORONS.:wacko::rolleyes:

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The amount of high rise going on in London seems astounding - another example of London hogging all the action.  Mind you by the look of some of the buildings and the effect on the surroundings they can keep it.

Edited by billybong

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1 minute ago, billybong said:

The amount of high rise going on in London seems astounding - another example of London hogging all the action.

Like Dublin circa 2007?

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Then there's the effect on transport and infrastructure with a sudden increase of thousands of new people suddenly starting to live in the one locality.  That never gets serious mention or debate in the media - all they're interested in is the images/photos of the shiny new high rises.

Edited by billybong

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3 hours ago, hotairmail said:

Goes on to say a record 26 tall buildings (> 20 stories) were completed in 2016. 24 of them were residential.

Most of them virtually empty as investors from China and other places buy the properties but never live there (and also often never rent them out).

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9 minutes ago, billybong said:

Then there's the effect on transport and infrastructure with a sudden increase of thousands of new people suddenly starting to live in the one locality.  That never gets serious mention or debate in the media - all they're interested in is the images/photos of the shiny new high rises.

Yes. This (and the ludicrous immigration level) is why the tube is massively overcrowded now. Always. 

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5 minutes ago, Errol said:

Yes. This (and the ludicrous immigration level) is why the tube is massively overcrowded now. Always. 

I still remember the days when the door open buttons on tube trains did something because it was possible no-one would need to get on or off through one of them.

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4 hours ago, Si1 said:

In that case govt should be developer of last resort, i think rk said this and it's spot on.

 

Agree. First they have to let developers fail so that cheap land hits the market. Govt buys it and contracts builders to do the construction. 

However, will they let developers fail? Instincts will favour a bailout and developers will play the angle that the construction and funding of affordable homes is dependent on their success. 

Something like the insurance package the govt gave the banks in 2008 might be applicable here - ie. saying to developers "We'll backstop your development at x price, but you have to release the land to someone else or carry on building, and we'll pocket a share of any profits". 

 

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1 hour ago, fru-gal said:

This ^. Why do people buy homes in London. The bulk are;

  • Foreign investors buy to make money from capital gains and many have lost quite a bit with the fall of the pound (anyone who bought before Brexit). There have also been quite a few changes to taxes that affect foreign buyers such as Inheritance tax, stamp duty, ATED, CGT in the last few years which makes buying (London) property less attractive.
  • BTLers are the other bulk buyers. They have been put off by falling prices since Brexit, S24, SDLT for second homes and general hostility towards them from the Government. Add to that the real possibility of reduced numbers of people coming from the EU to pay their mortgages and pensions rent.
  • The ones who are left are rich Londoners who will pay whatever because HPI innit.
  • Plus the stock market has gone up a lot in the past few years, so many some of these savvy buyers see that as the new get rich quick investment?

 

There is also the upper income quartile professionals leveraging themselves to the hilt.

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36 minutes ago, Patient London FTB said:

Agree. First they have to let developers fail so that cheap land hits the market. Govt buys it and contracts builders to do the construction. 

However, will they let developers fail? Instincts will favour a bailout and developers will play the angle that the construction and funding of affordable homes is dependent on their success. 

Something like the insurance package the govt gave the banks in 2008 might be applicable here - ie. saying to developers "We'll backstop your development at x price, but you have to release the land to someone else or carry on building, and we'll pocket a share of any profits". 

 

Regarding the last paragraph they've already bailed out the builders enough via the HtB etc packages and so on - and this is the end result - effectively a go slow for reasons of greed at a time when the government needs to meet a declared new home building target by the 2020 general election.

If the builders won't cooperate then replace them on the sites which at the very least have all the approvals (planning and design etc) - and if necessary with builders from outside.   Compulsory purchase or just plain confiscate if necessary - there are plenty of capable overseas builders and even from other parts of the UK itself.  Waste no more time or money on the current builders.  If it isn't already it's starting to become a matter of national security

Edited by billybong

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37 minutes ago, goldbug9999 said:

There is also the upper income quartile professionals leveraging themselves to the hilt.

Another negative for London property is that many financiers will be removed from London after Brexit when their companies relocate. Not so many idiots overpaid bankers to buy overpriced London flats in Battersea and elsewhere.

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26 minutes ago, billybong said:

Regarding the last paragraph they've already bailed out the builders enough via the HtB etc packages and so on - and this is the end result - effectively a go slow for reasons of greed at a time when the government needs to meet a declared new home building target by the 2020 general election.

If the builders won't cooperate then replace them on the sites which at the very least have all the approvals (planning and design etc) - and if necessary with builders from outside.   Compulsory purchase or just plain confiscate if necessary - there are plenty of capable overseas builders and even from other parts of the UK itself.  Waste no more time or money on the current builders.  If it isn't already it's starting to become a matter of national security

Developers can rightly argue that they have to answer to their shareholders and they're within their rights to go slow. And contracts can't be torn up. 

If you want to feel more angry, consider that the Help to Buy cash relieves the financial pressure on developers to sell their poorly-performing London units. 

For-profit development is inherently incapable of fixing the housing shortage on its own and it was truly madness to start subsidising it with Help to Buy. The government and electorate are hopefully on a journey to understanding that. 

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