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Forget Mortgage Approvals - Look At New Home Sales


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If you think Mortgage Approvals are bad - New Homes reservations were down 52% in October

July -19

August -31

September -32

October -52

Activity in the month compared with the same month a year ago (balance*)

The HBF survey is based on responses from over 400 companies across all regions of Great Britain weighted to take account of their size.

* Balance: % reporting an increase less % reporting a decrease (GB)

HBF = House Builders Federation

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Round here every new development (and boy are there loads of them) has big posters - 1k a month towards your mortgage for 2 years etc (Who the F*CK wants a mortgage bigger than a 1k - the mind boggles - is this normal nowadays).

Block of flats nearby - finished 3 months ago - went in this morning for a bit of Agent baiting. I do this in all new flats near me - tell them my mother in law is moving back from Florida and wants a new flat - how much are these - how much!!!!!!!!!! but thats nearly $400,000 - her condo is twice the size of this, has 3 swimming pools, a big recreational lake, beautifully maintained grounds and she is selling it for $120,000. I usually give then a 'you can't be serious' comment or two and then ask 'how many are sold now?'

'Well we have 2 under offer'. 2 out of 36 in 3 months - ever thought of dropping the prices.

So those two cars in the car park are yours. 'Yep' the agents chorused. Why do they have two people there selling no flats?

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Round here every new development (and boy are there loads of them) has big posters - 1k a month towards your mortgage for 2 years etc (Who the F*CK wants a mortgage bigger than a 1k - the mind boggles - is this normal nowadays).

Block of flats nearby - finished 3 months ago - went in this morning for a bit of Agent baiting. I do this in all new flats near me - tell them my mother in law is moving back from Florida and wants a new flat - how much are these - how much!!!!!!!!!! but thats nearly $400,000 - her condo is twice the size of this, has 3 swimming pools, a big recreational lake, beautifully maintained grounds and she is selling it for $120,000. I usually give then a 'you can't be serious' comment or two and then ask 'how many are sold now?'

'Well we have 2 under offer'. 2 out of 36 in 3 months - ever thought of dropping the prices.

So those two cars in the car park are yours. 'Yep' the agents chorused. Why do they have two people there selling no flats?

Prices are starting to drop

Call it what you want but 1K per month towards your mortgage is a 24k drop

Remember that in the last crash most of the big UK housebuilders were in essence family businesses

Now the BIG 4 all flog 1 billion pounds worth of homes

AND unlike Estate Agents they actually own their 'stock' - They have to sell regardless of market conditions

Check out the property press this weekend and you will see lots of New Homes offers (price falls)

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In our LPS there is a full page add advertising a large 4 bed detached with carpets for £245K. The catchment is 'The best home for your money'.I assume they are trying to make people believe these are good value for money. I've never seen this caption before.

Expect a lot more promotion for New Home Companies

EA's are still trying to convince themselves and anyone else who will listen the market will pick (spring bounce etc,)

New Homes companies already know what is happening

The figures I quoted earlier are from OCTOBER (bit of a time lag before they publically report)

The big volume builders are looking at their January figures as we speak

Doubt if it indicates a spring bounce!

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It is fascinating to watch how the UK and US markets (California mostly) are moving in the same direction at the same time with the same tell-tale signs of a crash. EAs here and in the US are using the "soft landing" phrase to describe the shock of falling prices. New construction are also offering "incentives" for the first time in a decade: free granite counter tops (I use the word "free" cautiously), free this and that. All signs that things are simply NOT SELLING.

Builders with stock on hand are more likely to deal as they have a lot of dosh tied up.

The threads of the last 3 or 4 days seem to leave little doubt that the crash is in full swing.

Watch the sale of muscle relaxants rise--Bears buying them as it is the only way to wipe the grins off their faces :)

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We have just moved from a new housing estate where before Xmas there were half a dozen stock 4 bed houses for sale - ie they were just sat there empty!!

A week into Jan I went past and saw that every house had a sold sign on it. I was taken back - as having just moved into rented I thought we were going to be in a mess.

After a couple of days of brooding, I rang the sales office and asked which plots were for sale and they happily listed all the one's with sold signs.

Not sure what they are playing at???

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We have just moved from a new housing estate where before Xmas there were half a dozen stock 4 bed houses for sale - ie they were just sat there empty!!

A week into Jan I went past and saw that every house had a sold sign on it. I was taken back - as having just moved into rented I thought we were going to be in a mess.

After a couple of days of brooding, I rang the sales office and asked which plots were for sale and they happily listed all the one's with sold signs.

Not sure what they are playing at???

Sounds like an offence under the Trades Description Act? 30 days and a 1000 pound fine on the first offence. :)

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Sounds like an offence under the Trades Description Act?  30 days and a 1000 pound fine on the first offence. :)

Good point! A friend of mine suggested that they may be accepting reservations from people who haven't sold their own house or even put their house on the market and then continuing to offer them just in case someone better comes along.

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Things are so good that Barrats are now advertising deals on daytime TV - mortgage paid, deposit paid, sell your house etc. I can't recall seeing developers advertising since the 'cold war' period at the start of the last crash. I don't watch daytime TV too often so maybe  I'm mistaken.

schadenfreude, I don't watch daytime TV (which has the cheap advertising slots) but I did see the Barratt ad on ITV1 yesterday evening PRIME TIME

That is an expensive advert

Don't know the exact rate card, but its got to be tens of thousands for a single ad

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Don’t be daft, your not looking at the has-no-facts seasonally adjusted figures for new builds, bet it shows new build sales are up 0.5% for the month  :lol:

I bet they would like to do a 'Nationwide' and seasonally adjust their figures up - BUT THEY CAN'T

Most New Home buiders are big plc's, so they may 'talk up' the market a bit, but they are accountable to the City and shareholders, as far as sales go they have to be HONEST

What they can do (its a free market) is use discounts, promotions etc, to move their stock

This will have an effect on local prices and this is HAPPENING NOW

If a new build in your area was 200K a few months back and another older house was also 200k

You can probably buy the new build today for 170k = 15% DROP

The owner of older house is still in denial - waiting for the spring bounce the EA promised -

His house hasn't dropped its still worth 200K in his mind cos the EA told him so

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From Barratt's home page today:

Great Home, Great Deals options:

£99 down and move in

Stamp Duty Paid

Legal Fees Paid

100% Home Exchange

5% Deposit Paid

Investor Package

Up to £10,000 Cashback

Pass me a bucket! I'm feeling sick.

If anything this should be a good indicator that prices *ARE* falling.

Good point about the private house seller in denial.

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Guest wrongmove
One such example from the local paper attached - must feel reassuring if you'd bought off-plan at an earlier stage!

I think that this is what the good doctor efers to as "the end of denial".

There is a huge development of flats near me, around 275 in one complex. The entire stock were sold off-plan ! It will be interesting to see what happens there when they are finally completed, probably this summer/autumn.

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A friend of mine suggested that they may be accepting reservations from people who haven't sold their own house or even put their house on the market and then continuing to offer them just in case someone better comes along.

Or possibly they just put up the 'Sold' signs to make it look like the market is moving when it's not? :rolleyes:

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I think that this is what the good doctor efers to as "the end of denial".

There is a huge development of flats near me, around 275 in one complex. The entire stock were sold off-plan ! It will be interesting to see what happens there when they are finally completed, probably this summer/autumn.

Builders taking reservations is a bit like an Estate Agents 'Sold' board (subject to contrat)

With these sorts of offers it doesn't take a lot to make a development look 75%SOLD OUT in the first few weeks, they don't even need to do an EA job and blatantly put false 'SOLD' boards

As Jayne pointed out earlier, you can buy a Barratt Home for £99 (subject to completion)

In the new homes sector, when a reservation falls through its a cancellation and they are definately on the increase (admitted by all the volume builders that have recently reported to the City)

275 flats may have legitimately been 'SOLD' however if the cancellation trend continues, I agree - it will be interesting to see how many actually COMPLETE

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Guest wrongmove
275 flats may have legitimately been 'SOLD' however if the cancellation trend continues, I agree - it will be interesting to see how many actually COMPLETE

Do you mean you can buy off plan and then cancel ? I guess you must at least lose a hefty deposit. These flats were sold during the boom, rather than recently.

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Do you mean you can buy off plan and then cancel ? I guess you must at least lose a hefty deposit. These flats were sold during the boom, rather than recently.

Depends on the Builder - not all builders are taking £99 deposits

But even if you put down 5-10%, if the property haves dropped 15% by the time you are due to complete and the market looks like it may drop further - some people will take the hit on their deposit and walk, especially if they are buying as a BTL investment as oppossed to buying a home.

I know people how took 50k deposit hits on London flats during the last crash (thats when 50K was a LOT of money!)

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  • 441 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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