teachertim Posted March 2, 2006 Share Posted March 2, 2006 Just a comment on the farce that is currently going on in Leeds City Centre, every major builder in the UK has at least one (some have 2!) developments of 300+ flats and they just keep on coming ! According to a source I have over 3000 2 bed apartments are being built within 1 mile of the Leeds train station this year. All are being 'sold' (not!) for over £250k. Flash back to the first major 'mixed use' development built about 5 years ago right next to the station, half of those are still empty and unsold. Why do builders insist on flooding the market with apartments that are over priced that no one wants. A colleague of mine bought one in 2002 and sold it in 2005 for a 50K loss ! Why do they do it ? Quote Link to comment Share on other sites More sharing options...
BandWagon Posted March 2, 2006 Share Posted March 2, 2006 (edited) I find it quite interesting watching how this all helps to create boom and bust. I read an article about a year back about a developer who'd seen the light, offloaded all their new-build stock and moved their business into goverment projects. I suspect the others just keep building until the banks and shareholders turn off the money tap, which should have happened about 2 years ago. On the bright side, I can just imagine students in about 10 years time being amazed at how cheap it is to rent an apartment in the city centre, with all that other spare cash to spend on beer. I will envy them. Edited March 2, 2006 by BandWagon Quote Link to comment Share on other sites More sharing options...
simon99 Posted March 2, 2006 Share Posted March 2, 2006 The UK population is growing fairly rapidly. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted March 2, 2006 Share Posted March 2, 2006 I find it quite interesting watching how this all helps to create boom and bust. I read an article about a year back about a developer who'd seen the light, offloaded all their new-build stock and moved their business into goverment projects. I suspect the others just keep building until the banks and shareholders turn off the money tap, which should have happened about 2 years ago. On the bright side, I can just imagine students in about 10 years time being amazed at how cheap it is to rent an apartment in the city centre, with all that other spare cash to spend on beer. I will envy them. How much does it cost to build these things? Including the land prices. In particular if the land had been bought some time ago and put in the bank. House prices have increased dramatically, but I can't see that the costs of building will have increased. Particularly if what I've heard about recent developments concerning wages in the building sector is true. Could the builders sell these flats for £125K and still make a profit? That's what these flats sold for not that long ago. Billy Shears Quote Link to comment Share on other sites More sharing options...
apom Posted March 2, 2006 Share Posted March 2, 2006 How much does it cost to build these things? Including the land prices. In particular if the land had been bought some time ago and put in the bank. House prices have increased dramatically, but I can't see that the costs of building will have increased. Particularly if what I've heard about recent developments concerning wages in the building sector is true. Could the builders sell these flats for £125K and still make a profit? That's what these flats sold for not that long ago. Billy Shears of course they could.. over a decade ago a girlfriends father built housing association homes.. the material cost (not including plumbing or electrics or double glazing.. just the shell) was about £2000.. How much do you think bricks and cemment costs when bought in such massive bulk? I would be surprised if the material cost for any current new build exceeds £40,000 including windows.. Flats a whole lot less.. It's two booms, one on the percieved value of a home, the second is on building new homes.. well because they can be sold at massive profit.. this leads to oversupply.. and percieved value drops when there are too many.. Why won't BTL mortgage providers lend against new builds..? 1: Inccentives make it hard to value 1 a) Why are there Incentives? There are too many 2: The lenders are concerned that there are too many. and the bulls think everything is fine and dandy.. Quote Link to comment Share on other sites More sharing options...
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