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halebop

Major Builders Halting New-build Projects?

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anecdotal from what i am hearing thru the grapevine.

some of the major builders are struggling to sell and there is talk of halting the work on some projects thru lack of sales. now this is"nt certain but it will happen if things dont pick up!

question is could this cause prices to increase due to supply restrictions

whats your thoughts?

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anecdotal from what i am hearing thru the grapevine.

some of the major builders are struggling to sell and there is talk of halting the work on some projects thru lack of sales. now this is"nt certain but it will happen if things dont pick up!

question is could this cause prices to increase due to supply restrictions

whats your thoughts?

If this is true, then there is zero demand.

I don't believe it though, because a company does not halt their core business. They'd keep building but cut the profit margin, if it ever came to that.

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If this is true, then there is zero demand.

I don't believe it though, because a company does not halt their core business. They'd keep building but cut the profit margin, if it ever came to that.

its what ive heard and from reliable sources

but your right they would cut margins first and there is talk of that also (i"m a subbie and cut backs are already happening)

i would like to point out that this is on certain sites only!

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IT IS NOT showing up in the share prices of the Builders,

and most of the companies have given generally upbeat reports along with financial info released in teh past few weeks.

...so your report sounds like a disconnect. Allow the value proposition is against newbuildings,

and more and more buyers are waking up to this point, despite the big discounts which are "manufactured"

by pumping up official asking prices

I WOULD be interested in hearing more about your source, and whether they are reliable?

What area are you in, please?

agreed its not showing up in share prices

but it does"nt mean it"s not happening!

as i said its only talk at the moment and only if things dont pick up!

i would prefer not to say where exactly /but don"t dissmiss this info i am genuine!

bubb i will pm you and let you know a bit more ok

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If this is true, then there is zero demand.

I don't believe it though, because a company does not halt their core business. They'd keep building but cut the profit margin, if it ever came to that.

this is what i have heard honest

could it be that the demand is so little and they have paid so much for the land

that its more viable to sit on it for the time being .

and instead of building and not selling or having to reduce profit they will stoke up demand by creating a shortage of housing in the areas in question?

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Guest consa

There is three large development sites around my way which have been desolate for about a year, no, one has just had foundations put in (this is a standard condition for planning permission IE: the development shall be commenced within 3 years from the date of this permission)

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anecdotal from what i am hearing thru the grapevine.

some of the major builders are struggling to sell and there is talk of halting the work on some projects thru lack of sales. now this is"nt certain but it will happen if things dont pick up!

question is could this cause prices to increase due to supply restrictions

whats your thoughts?

This would be a last resort approach and ultimately suicidal. More land is coming online for building, if the builders don't build on existing plots they cannot indefinitely buy and increase land banks.

Hence, less competition for new land sales, hence lower prices for new land, hence lower values for their land banks, hence lower share price, hence CEO in the mire.

So, sorry but i don't believe that builders could or would try to manipulate prices by building less.

I wouldn’t rule out your source for an individual project or even a small builder but unless you can be more specific with examples I don't think your post is that relevant or likely. People often exaggerate to make an anecdote be more meaningful

Having, said all that if you’re right great. I will pick up some land soon on the cheap.

Cheers

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my anecdotal info is that house building slowed 2 years ago in the south east and began slowing in the midlands middle of last year.

halebop indicates that he is from north west and if this is right it would coincide with slowdown reaching the north about now.

builders will slow build programmes and try and hold prices.

they will have to build/sell a certain amount of units to cover fixed overheads costs.

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This would be a last resort approach and ultimately suicidal. More land is coming online for building, if the builders don't build on existing plots they cannot indefinitely buy and increase land banks.

Hence, less competition for new land sales, hence lower prices for new land, hence lower values for their land banks, hence lower share price, hence CEO in the mire.

So, sorry but i don't believe that builders could or would try to manipulate prices by building less.

I wouldn’t rule out your source for an individual project or even a small builder but unless you can be more specific with examples I don't think your post is that relevant or likely. People often exaggerate to make an anecdote be more meaningful

Having, said all that if you’re right great. I will pick up some land soon on the cheap.

Cheers

why build houses if they are not selling ?to stand empty ?

all they will do is send the staff to another site that is selling.they will halt building on the one that isnt to save costs. most of the workers on building sites now are sub-contractors. the builder has no obligation to keep them busy

the last few years has seen lots of major builders merge together

if it keeps going there will only be one or two major builders nationwide imo

i heard the other day talk of wimpey buying taylor woodrow/bryant homes(dont know if this is true)

but could it be that they are trying to create a monopoly?

if you dont buy we dont build hence shortage of housing? just to keep prices up

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why build houses if they are not selling ?to stand empty ?

all they will do is send the staff to another site that is selling.they will halt building on the one that isnt to save costs. most of the workers on building sites now are sub-contractors. the builder has no obligation to keep them busy

the last few years has seen lots of major builders merge together

if it keeps going there will only be one or two major builders nationwide imo

i heard the other day talk of wimpey buying taylor woodrow/bryant homes(dont know if this is true)

but could it be that they are trying to create a monopoly?

if you dont buy we dont build hence shortage of housing? just to keep prices up

why build houses if they are not selling ?to stand empty ?

You build houses because that is your business. If you can't sell them at a profit you go bankrupt.

Businesses simply can't stop operating to wait for conditions to improve. You may move into different markets etc but if you're a builder what other market is there?

if you dont buy we dont build hence shortage of housing? just to keep prices up

As i pointed out previously this is a suicidal strategy and just does'nt stack up.

You build houses because that is your business. If you can't sell them at a profit you go bankrupt.

Businesses simply can't stop operating to wait for conditions to improve. You may move into different markets etc but if you're a builder what other market is there?

As i pointed out previously this is a suicidal strategy and just does'nt stack up.

Anyway. The stats are below. The point is simple builders build or they go out of business.

During the twelve months to the end of September 2005 in England there were:

175,900 starts, up 2 per cent on the figures for the previous twelve months

154,900 completions, up 1 per cent on the figure for the previous twelve months

Provisional 2004/05 figures for the UK show 225,960 starts, up 7 per cent of the previous financial year, and 205,960 completions, up 8 per cent.

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You build houses because that is your business. If you can't sell them at a profit you go bankrupt.

Businesses simply can't stop operating to wait for conditions to improve. You may move into different markets etc but if you're a builder what other market is there?

As i pointed out previously this is a suicidal strategy and just does'nt stack up.

surely they are more likely to go bankrupt if they spent money on building them?

instead of stopping the build program in the given area

and moving the employed staff elsewhere to a site that is still selling houses.

mr nice

are we on the same lines here?

i am not talking on a large scale lots of sites .just a few

i am not dissagreeing that the build numbers are up!

have you noticed barratt homes getting more into social housing?

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surely they are more likely to go bankrupt if they spent money on building them?

instead of stopping the build program in the given area

and moving the employed staff elsewhere to a site that is still selling houses.

Agreed. A builder can move within the building market but not out of it. And on difficult sites they may slow phases to get sales through. This is a risky strategy though due to the land bank point i made previously.

I would be interested to know what the fixed variable cost ratio is for a major builder and an individual site.

BTW

Sorry, i misinterpreted your original post. I thought you were indicating that builders were stopping projects on mass in attempt to manipulate prices.

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If this is true, then there is zero demand.

I don't believe it though, because a company does not halt their core business. They'd keep building but cut the profit margin, if it ever came to that.

The game may be one step further along than you imagine - they have been offering huge discounts which don't appear in Land reg. figures for quite a while now. Perhaps they have already trimmed margin down considerably, and have no option but to stop building? Otherwise they will be selling at a loss.

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Cutting margins wouldn't be too hard for developers. Given the price of flats 7 years ago and now. The build costs won't have gone up beyond inflation except for the land. If they cut them by 1/3rd they would probably be looking at the profit margins of 7 years ago. They just don't want to because they can't believe they aren't on a roll anymore.

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anecdotal from what i am hearing thru the grapevine.

some of the major builders are struggling to sell and there is talk of halting the work on some projects thru lack of sales. now this is"nt certain but it will happen if things dont pick up!

question is could this cause prices to increase due to supply restrictions

whats your thoughts?

this will depend on the current value of the land..

If you look at modern new builds you can tell that they are cehaper to build then at any point in history...

Unless cardboard and mdf is more expensive then bricks and mortar..

Its down to the land..

Profit margins are huge and the land goes for a lot..

but if properties arent selling land with planning permission is not going to be quite as valuable as you thought.

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There has been lay offs on the site I'm currently on in various trades . Also heard one of the foremen saying that they need to cut down on Labour costs.

If you're interested the site is pretty much ALL 2nd homes , starting at £500k , going up to £10mil.

Dames

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woooooh---hoooo!!!!!

quality!!!!!!!!,I remember this happening last time around!

next stop,construction lay-offs BIGTIME!!!!!!

IT IS NOT showing up in the share prices of the Builders,

and most of the companies have given generally upbeat reports along with financial info released in teh past few weeks.

...so your report sounds like a disconnect. Allow the value proposition is against newbuildings,

and more and more buyers are waking up to this point, despite the big discounts which are "manufactured"

by pumping up official asking prices

I WOULD be interested in hearing more about your source, and whether they are reliable?

What area are you in, please?

...MIGHT BE RIGHT BUBB!,I've noticed a number of newbuild on my commute that are still partially built,with little sign of progress over the last couple of months.Hardly the type of action you'd expect if they were flying off the shelves is it?

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The law changes in March. 50% of all new developements have to have affordable housing which is why developers are rushing through plans now for new developments before the deadline. Most Planning Depts are working overtime at the moment keeping up with the demand becuase affordable housing costs more to build as local authorities check the buildings are built to the agreed stds.

Doesn't this mean the house price crash is off. More parasite housing means higher prices for people with real jobs. Also, if I'm reading it right, does this mean that housing given away to the work-shy, asylum seekers etc. has to be higher standard than housing for people who actually pay for it? Sums up the problem with Britain.

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I remember last time a street of newbuilds near my parents, they just stopped building and they sold

the houses in different stages of build, in some cases they sold just the plot of land. My father always says this is the perfect sign that the crash has started.

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Doesn't this mean the house price crash is off. More parasite housing means higher prices for people with real jobs. Also, if I'm reading it right, does this mean that housing given away to the work-shy, asylum seekers etc. has to be higher standard than housing for people who actually pay for it? Sums up the problem with Britain.

Affordable housing is SUPPOSE to be for people like me. I work. I earn a wage. I am an immigrant but that is neither here nor there. Which bit makes me a parasite? I pay rent. I live in a HMO which is at a decent standard which is the basic. Effective plumbing, heating, wiring, drainage, no water ingress, I have a kitchen sink. I have hot water. I have a bathroom with a toilet. My house is insulated to an appropriate level.

In west london affordable housing is being built for those with an income of 70K. So your point is?

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Affordable housing is SUPPOSE to be for people like me. I work. I earn a wage. I am an immigrant but that is neither here nor there. Which bit makes me a parasite? I pay rent. I live in a HMO which is at a decent standard which is the basic. Effective plumbing, heating, wiring, drainage, no water ingress, I have a kitchen sink. I have hot water. I have a bathroom with a toilet. My house is insulated to an appropriate level.

In west london affordable housing is being built for those with an income of 70K. So your point is?

It shows how extreme the situation is when skilled graduates need to consider 'affordable' housing.

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  • 301 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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