News from the coalface aka house builder inside info

[simvastatin]

Very interesting thread 

[maffo in oxford]

My three month trial has ended, I've left the company for a small Builder specialising in refurb and smaller, bespoke projects. It's more my type of work, and I have to admit to find it hard to work for such a shoddy company on ethical grounds.

[Freki]

Congratulation, any last small takeaways?

[maffo in oxford]

Not really apart from BTL/speculation sales appear to be down quite considerably .

[ftb_fml]

Aye - congrats!

Thanks for your insight while you were there - some of us appreciated it

[Bankside]

Thanks Maffo, your insight was really interesting to hear. 

Good luck with the new role. 

Bankside. 

[maffo in oxford]

Thank you, even the first few days have been massively more enjoyable than the whole of my previous employment period!

I'm starting to see quite a lot more stock on the 2nd hand market in surrounding counties, quite a few ex BTLs by the looks of things. Some slightly lower asking prices here and there too.

[jiltedjen]

On 18/07/2018 at 11:54, maffo in oxford said:

Not really apart from BTL/speculation sales appear to be down quite considerably .

Thank god that in January the press with be on full throttle as the BTL tax bills land.
The 'Buy To Let is DEAD!" articles will start to turn away the moron masses from such leveraged investments. 

I have seen a few obvious ex BTL properties hit the market, but only the odd one or two, im expecting a flood early next year. 

[stop_the_craziness]

1 hour ago, jiltedjen said:

Thank god that in January the press with be on full throttle as the BTL tax bills land.
The 'Buy To Let is DEAD!" articles will start to turn away the moron masses from such leveraged investments. 

I have seen a few obvious ex BTL properties hit the market, but only the odd one or two, im expecting a flood early next year. 

It's game on in Bedfordshire already.  I don't think there is a single two-bed house in my search area that doesn't have (in capital letters) "NO UPPER CHAIN" in the description.  Problem is the prices are still fantasy, but I'm hoping that bit of the equation will fall into place once the tax bills start hitting home.

[disenfranchised]

On 19/07/2018 at 13:39, maffo in oxford said:

Thank you, even the first few days have been massively more enjoyable than the whole of my previous employment period!

Congratulations...

Before this thread drifts off into the ether, I wanted to come back to something you said a while ago about profitability. You quoted 20% on a plot meeting RSP. So, I assume a £300k house makes about £60k. 

Round here, a £300k house on a new build site is generally a 3 bed detached or 4 bed semi. They invariably sit a claustrophobic distance from the road with a pathetic pubic hair like strip of grass separating the front from the pavement, most have a single drive, ensuring every house will have a car or van parked up the kerb outside. Horrid.

£260k will buy a similar quality "used" property a few years old with a motivated seller. £280k starts to get into nicer detached 90s built 3 or small 4 bed with a double drive and several beautiful metres of seperation from the road.

Such is the desperation of one seller to exit their recently purchased £300k slavebox listed since January, that they have lowered their price to £285k (blowing their 5% HTB deposit, boo hoo) and have now instructed no less than 5 estate agents. 

So, the question is this - what's the build cost of a £300k detached 3 bed excluding the land or sits on? How much of the cost isn't land?

It was often said a few years ago that if the big land banking developers valued their land to market they'd be ruined. As I see it, most of the 20% margin they are making is pure HTB sub-prime debt, I just want to understand the mechanics of it better in terms of build cost.

There should be a public enquiry on HTB, it looks like the most blantant kind of crony capitalism, along with the banks socialised losses these are private government backed profits.

[maffo in oxford]

I think the build cost for a volume developer in the South of England is around £1,000 sqm,  so the typical 90sqm three bed is around £90K. Development land is well over £1 million per acre so more of the total cost is land, a lot would have been banked years ago so will still turn a profit. Recent acquisitions will prove more difficult,  probably close to impossible without the subsidy from HTB etc 

[user not found]

2 hours ago, maffo in oxford said:

I think the build cost for a volume developer in the South of England is around £1,000 sqm,  so the typical 90sqm three bed is around £90K. Development land is well over £1 million per acre so more of the total cost is land, a lot would have been banked years ago so will still turn a profit. Recent acquisitions will prove more difficult,  probably close to impossible without the subsidy from HTB etc 

Just out of interest... How many 3 bed semis would fit on an acre (just trying to work out profit margins). Also what size are new build 3 beds these days?

[maffo in oxford]

Three beds are generally the least profitable afaik for plot area required, a developer makes a lot more from flats and 4-5 beds with postage stamp gardens. A developer would aim to put at least twelve to sixteen 3 beds on an acre, so you're looking at £200k ish all in at today's prices for plot + build cost, then £40k to cover other costs like local authority taxes and insurances etc.

£300k asking would give you the 20% profit, which sits right with what I have been told.

Edited July 24, 2018 by maffo in oxford
missed a bit

[Andy T]

Are these 3 or 4 beds over two floors or three generally?

Where I work up North, near Bolton, all the new builds seem to be 3 floors now, top floor in the steep, dormer window roof. Very small footprint, either semi's or terraced. The land was probably quite cheap as well, but still trying to cram as many plots into a small site as possible.

 

[Freki]

I was in Nimes, south of France, last weekend.

The rule is, for a villa to be constructed it needs at least 2000 sqm plot of land.

[hamish1985]

Just an update on this thread, I’m seeing a significant slowdown appearing in the south on our sites, quite a few completed plots sat for sale on various locations. Anyway else seeing this?

[maffo in oxford]

No Idea I'm afraid, I'm back to refurb and commercial projects.

[spyguy]

9 hours ago, hamish1985 said:

Just an update on this thread, I’m seeing a significant slowdown appearing in the south on our sites, quite a few completed plots sat for sale on various locations. Anyway else seeing this?

My observation in the South is that lots - and I mean lots - of bronw field sites have been converted into flats.

Typically these have been fin service office sites that have been knocked down and very high density OAP flats built.

There's been quite a few of office refurbs too.

All flats. The odd collection of townhouses i.e tall narrow chicken hut.

This has been going on ~4-5 years.

What Im seeing today is that barely any have sold. Some of the townhouse new builds have been empty for over 12 months with just the ones given over to social housing occupied.

There appears to ne OAP interested in the OAP places - see McCarthy Stone and the others, that scam as ended.

What Im hearing from suppliers and contractors is that whoever commissioned the building are trying to avoid paying people, more so than the norm.

It appears HTB and hte planning rules have created a mini boom for 3-4 years. This is being followed by a large bust as there's just not the mortgage finance or money to buy the new developments.

Your experience may vary.

 

 

 

 

[The Preacherman]

Miller Homes are laying off staff in the Midlands and are planning to hold on to land rather than develop it. 

[Si1]

On 24/07/2018 at 09:35, Andy T said:

Are these 3 or 4 beds over two floors or three generally?

Where I work up North, near Bolton, all the new builds seem to be 3 floors now, top floor in the steep, dormer window roof. Very small footprint, either semi's or terraced. The land was probably quite cheap as well, but still trying to cram as many plots into a small site as possible.

 

You'd think a more sensible layout would be as maisonettes, to give more horizontal living space; I know a family that lives in one of these 3 story things, and say that theb living room in actual practice is not integrated into their day to day living, ergo they don't use it, because it's upstairs.

[user not found]

On 21/11/2018 at 06:38, spyguy said:

My observation in the South is that lots - and I mean lots - of bronw field sites have been converted into flats.

Typically these have been fin service office sites that have been knocked down and very high density OAP flats built.

There's been quite a few of office refurbs too.

All flats. The odd collection of townhouses i.e tall narrow chicken hut.

This has been going on ~4-5 years.

What Im seeing today is that barely any have sold. Some of the townhouse new builds have been empty for over 12 months with just the ones given over to social housing occupied.

There appears to ne OAP interested in the OAP places - see McCarthy Stone and the others, that scam as ended.

What Im hearing from suppliers and contractors is that whoever commissioned the building are trying to avoid paying people, more so than the norm.

It appears HTB and hte planning rules have created a mini boom for 3-4 years. This is being followed by a large bust as there's just not the mortgage finance or money to buy the new developments.

Your experience may vary.

 

4 lots of offices converted into flats near me. Worthing area. I think we're heading into oversupply and thus price of flats tanking.

[chronyx]

I was in Oxford recently. Big open fields with a typical estate crammed into the middle. Looks ridiculous.

[Fromage Frais]

10 hours ago, Si1 said:

You'd think a more sensible layout would be as maisonettes, to give more horizontal living space; I know a family that lives in one of these 3 story things, and say that theb living room in actual practice is not integrated into their day to day living, ergo they don't use it, because it's upstairs.

Its not uncommon in France to have large old flats as it is in North Africa.

120/150/200 m2 flats not uncommon.

On one level that feels larger than a house as no stairs (or garage included).

Put a couple of parking spaces and a balcony and i dont see the issue.

I guess no money in that when you can put 3 "executive" flats in the same space.

With all this climate change and conversion of old offices it feels like an opportunity lost.

I am not a particular fan of brutalist architecture but if  we have a crisis of homes then more up to date interpretations of the barbican / citi radieuse type projects should have been considered.

• Build the properties people want the size they need
• make them mega energy efficient
• make those developments eligible for help to buy only.

I am readying now the latest ruse is to ban gas heating...... after subsidising all these toy town homes and flats.

 

Edited April 20, 2019 by Fromage Frais

[Flopsy]

1 hour ago, Fromage Frais said:

Its not uncommon in France to have large old flats as it is in North Africa.

120/150/200 m2 flats not uncommon.

On one level that feels larger than a house as no stairs (or garage included).

Put a couple of parking spaces and a balcony and i dont see the issue.

I guess no money in that when you can put 3 "executive" flats in the same space.

With all this climate change and conversion of old offices it feels like an opportunity lost.

I am not a particular fan of brutalist architecture but if  we have a crisis of homes then more up to date interpretations of the barbican / citi radieuse type projects should have been considered.

• Build the properties people want the size they need
• make them mega energy efficient
• make those developments eligible for help to buy only.

I am readying now the latest ruse is to ban gas heating...... after subsidising all these toy town homes and flats.

 

It can get really hot living in a flat as opposed to a house with a garden. Flats are being built with low ceilings and no thought to ventilation, sun and air flow.

Noise and light pollution in cities means it's more uncomfortable to keep windows open. In our last London flat it didn't make enough difference anyway. 

London flats weren't like the large, spacious, Parisian apartments unless they were on the 1st floor of a Georgian building or similar with high ceilings and large sash windows on both sides. 
 

[Si1]

31 minutes ago, Flopsy said:

It can get really hot living in a flat as opposed to a house with a garden. Flats are being built with low ceilings and no thought to ventilation, sun and air flow.

Noise and light pollution in cities means it's more uncomfortable to keep windows open. In our last London flat it didn't make enough difference anyway. 

London flats weren't like the large, spacious, Parisian apartments unless they were on the 1st floor of a Georgian building or similar with high ceilings and large sash windows on both sides. 
 

Slums of the future...