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George

Data I've Gathered Suggest Houses (new) Are Massively Down

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I had a price list from Barratt last year that had 2 bed flats at a median price of £170,000. Got new price list for new development of mirror flats, median price of £135,000. Big loss that. Also anecdotal evidence shows other losses on new builds (especially flats), prices paid for include £159,950 in 2005 and for sale today at £143,000, around 11% loss, and that's if it sells.

Also noted is the complete lack of consumer intelligence in the UK. I always ask or workout price per sq ft (ppsqft). and from that judge "worth" based on certain criteria:

location

facilities

etc.

It seems to me that there is WILD price discrepancies between non-differential housing. Example: An Ipad commands a price of £105,000 and offers 384sq ft of living space which equates to a ppsqft of £273. On a different note a 2 bedroom apartment that isn't aimed at FTB's has a price of £135,000 and offers 669sqft of living space which gives ppsqft of £201. This is a 73% price margin per sq ft, for a non differential residence. Many other prices are similar.

The main thing is though, is if I had bought in 2005 and tried to sell now, id be looking to complete with the manufacturer (Barratt) and so due to their reduced prices would suffer from channel conflict i.e. I lose money.

Note to consumer:

Caveat Emptor. :ph34r:

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Lanchashire North West. There is also ppsqft for other 2 bed appartments at £177. Worked out the cheapest in a brief look.

Ipad commands a 154% margin. Using premium pricing for not premium product. For that price I'd expect concierge, gym etc. Shows consumer is stupid if they purchase.

Edited by George

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Interesting.

Seems the same as new build in my area.

Persimmon asking £200K for a particular house model last year (Dec 05).

Now asking £182K and offering incentives (All of: Legals paid, Stamp duty paid, carpets, lawn turf etc)

The added incentives (not available before) are probably worth another £5K.

That would take the effective price to £177K, or a £23K fall.

In 7 months.

Annualised this would represent a fall of almost 20%!

And we're getting towards the quieter time of the year :lol:

But I've not calculated the value per sq foot.

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I live in Slough and unbelievably new build flats are still selling, even the blocks of flats that have been slated in the "house prices in your area" forum.

It's for this reason that resale house prices are increasing and will continue to until people stop paying £200K+ for a 2 bed flat.

By the way. I'm a bullish from what I see in Slough. That's not to say it's the same everywhere.

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Quite right; people should work out cost per square foot and they don't.

I disagree.

When the SQ Foot of the property is available I usually do calculate the value based on floor space.

Distribution of that space is equally important (tiny bedrooms and one huge bathroom isn't much use).

Why would the floor space of a property relative to its price (given the same location etc) be irrelevant?

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As has been suggested before, it's possible that these lower prices don't mean that the developers are making a loss. They may be making a smaller profit. How cheaply can they sell these newbuilds and still make profit?

Billy Shears

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As has been suggested before, it's possible that these lower prices don't mean that the developers are making a loss. They may be making a smaller profit. How cheaply can they sell these newbuilds and still make profit?

Billy Shears

Much cheaper than they are now.

Its not difficult to haggle with them and put in a lower offer.

I would not buy a new build but occassionally wind up their sales staff just to test the market.

A B*****TS sales rep told me that they'd definitely accept offers of around £195K on an asking price of £225K, but that if you offered anything lower it would have to be agreed by their head office!?!

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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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