Jump to content
House Price Crash Forum
Quoth

New Builds...

Recommended Posts

Hi all,

This weekend the wife and I went to look at a new build development just north of Bristol (just checking it out, not considering buying ;) ). The asking prices were astronomical in my opinion - four bedroom houses starting from £360k. That money buys you a reasonable (but not great) modern home in a high density development right next to the M4 on the site of an old mental institution. I can't see them selling at these prices although quite a few on the site plan seem to be marked as sold.

I was curious as to what happened to the price of new builds in the last crash? Did the prices of such developments fall proportionately to the rest of the market or did they suffer more?

Regards,

Q

Share this post


Link to post
Share on other sites
No idea what happened last time - dont think we had the exact same conditions with so many inner city new build flats.

How does 360K compare with the established houses in that area?

I think four bed detached in the area are around £340k. The new builds starting at £360 are either terraced or semi-detached.

Regards,

Q

Share this post


Link to post
Share on other sites

Its a no brainer, why pay more for a new build, when the established properties are cheaper. Most people prefer older houses with features.

I could understand the attraction of the new houses if they were 50K less than the established properties.

Share this post


Link to post
Share on other sites

Not new builds, but my wife had a house in Exeter which eventually sold for less than its rebuild price i nthe early 1990s, despite being in a quiet cul de sac opposite a park. IF we go there again then price of land and building activity will be in a mess.

Share this post


Link to post
Share on other sites

My flat was new in 1989 and it crashed and burned in the last property crash.

Houses may do better than flats, especially this time around.

Make sure the new build has the downturn built into the price - new build flats in Essex have fallen at least 25% since 2006.

See if you can buy the last plot on a development - the developer will be anxious to offload it at any price.

Personally I don't see the point in buying a new house, there is a big premium to pay and you have a lot of hassle from all the snags.

Share this post


Link to post
Share on other sites
Personally I don't see the point in buying a new house, there is a big premium to pay and you have a lot of hassle from all the snags.

Agreed - the lure of being able to move straight into a new home is offset by quite a few negatives. Those that I consider:

Quite a hefty premium

Density of modern developments

Dimensions of modern vs older houses

Regards,

Q

Share this post


Link to post
Share on other sites

I was working for a property developer last time around. We used to do housing and commercial and I used to work on both.

On the new housing front, we just gradually stopped building them.

So it went like this:

One day we are building as fast as we can.

Then, as sales slowed, we're told to build up to (say) plot 52.

Then, as sales slowed further, we're told to put the roof on plots 46 and 47 and stop building plot 48 at joist (1st floor) level.

Then we sit and wait.

Then some of us were made redundant.

Meanwhile the houses completed so far were sold for whatever they could get.

Then, as the last couple finished finally sold, we were told to get a few subbys back on and finish plot 46. At which point, it is probably worth noting, the subbys were being offered half of what they were earning 18 months ago on a 'take it or leave it, there's a thousand more waiting to do it for whatever we're offering' basis.

In the background the bank is getting very worried about the massive loan it had provided for us to build a site for 250 houses. And it started insisting on payments being made and kept up to date - i.e. no leeway.

Then they called the loan in and the company went into receivership. A scenario that was played out all over the country.

Share this post


Link to post
Share on other sites
I was working for a property developer last time around. We used to do housing and commercial and I used to work on both.

On the new housing front, we just gradually stopped building them.

So it went like this:

One day we are building as fast as we can.

Then, as sales slowed, we're told to build up to (say) plot 52.

Then, as sales slowed further, we're told to put the roof on plots 46 and 47 and stop building plot 48 at joist (1st floor) level.

Then we sit and wait.

Then some of us were made redundant.

Meanwhile the houses completed so far were sold for whatever they could get.

Then, as the last couple finished finally sold, we were told to get a few subbys back on and finish plot 46. At which point, it is probably worth noting, the subbys were being offered half of what they were earning 18 months ago on a 'take it or leave it, there's a thousand more waiting to do it for whatever we're offering' basis.

In the background the bank is getting very worried about the massive loan it had provided for us to build a site for 250 houses. And it started insisting on payments being made and kept up to date - i.e. no leeway.

Then they called the loan in and the company went into receivership. A scenario that was played out all over the country.

Thanks for that.

In light of the banks and mortgage lenders tightening their lending criteria I doubt that there will be many that can afford an older house never mind the new builds with their premiums.

I suppose things will unfold this time round just as you said they did last time. Sit and wait...

Regards,

Q

Share this post


Link to post
Share on other sites

Traditionally new builds would actually depreciate in price for 5 to 10 years after being purchased before begining to 'show a profit' but that all went out of the window in this bubble. It will be interesting to see whether it returns or not once the bubble has bust.

All houses were new at some point and, at various points in the last century, there were times when houses were built well and when houses were built badly. Round my way there are loads of 1960s/70s houses that look as if they will blow over in a wind. Then there are lots of 1930s houses which seem incredibly well built but most are so 'tired' that they need made modernisation work on them now. I recently sold a 1900 Edwardian terrace that was beautifully to look at but the walls were basically one layer thick so heating was constantly on in winter, there was no sound insulation and all the ceilings were lath-plaster. Yes, it looked fantastic but I don't think the quality of it was any better than houses built today.

I suppose with new builds it all depends on who builds them. I have been to some chain firms and their new builds have been awful. I have been to some new builds made by small local firms and they are fantastic quality.

360K for a new build in Bristol - nah, I would wait 18 months and see how this crash plays out. It might be 180K by then.

Share this post


Link to post
Share on other sites
All houses were new at some point and, at various points in the last century, there were times when houses were built well and when houses were built badly. Round my way there are loads of 1960s/70s houses that look as if they will blow over in a wind. Then there are lots of 1930s houses which seem incredibly well built but most are so 'tired' that they need made modernisation work on them now. I recently sold a 1900 Edwardian terrace that was beautifully to look at but the walls were basically one layer thick so heating was constantly on in winter, there was no sound insulation and all the ceilings were lath-plaster. Yes, it looked fantastic but I don't think the quality of it was any better than houses built today.

Period charm though innit. Georgian / edwardian / victorian etc can be hugely impractical but who cares, they look nice. 30s houses on the other hand can be incredibly well built but my god they're ugly.

Share this post


Link to post
Share on other sites
Period charm though innit. Georgian / edwardian / victorian etc can be hugely impractical but who cares, they look nice. 30s houses on the other hand can be incredibly well built but my god they're ugly.

Yes, a BDSM dungeon only really looks good in a Victorian or Edwardian property - anything else simply does not have the atmosphere! :ph34r:

Share this post


Link to post
Share on other sites

Not sure about England, but in NI the new build prices are getting axed before the rest of the housing stock has woken up to the fact we're in a crash now.

For example, I know of two new build estates in my region which have slashed over 10-15% off their prices over the last 4 months. The funny thing is, they are now undercutting people trying to sell (flip?) their houses by huge figures too. On my estate, the new build, 3 bed semis are now going for £175k, down from £195k a month or so ago, yet there is some guy trying to sell the same house type at £220k - £45k more?!

On another estate in a nearby town, they've cut their 3 bed terraces to £195k from £215k. Once again, there are people selling 2/3 beds at more than this on the same estate. I saw one (optimist!) trying to sell a 3 bed flat for £233k - £38k more than a similar new build!

The market over here is in collapse and I get the feeling it's happening so quickly that there are many who still think "house prices only go up", while at the same time, the wise are slashing their prices to get out while they can. Saying that, even the slashed prices don't seem to be selling... house boom NI RIP.

Edited by Traktion

Share this post


Link to post
Share on other sites
I was working for a property developer last time around. We used to do housing and commercial and I used to work on both.

On the new housing front, we just gradually stopped building them.

So it went like this:

One day we are building as fast as we can.

Then, as sales slowed, we're told to build up to (say) plot 52.

Then, as sales slowed further, we're told to put the roof on plots 46 and 47 and stop building plot 48 at joist (1st floor) level.

Then we sit and wait.

Then some of us were made redundant.

Meanwhile the houses completed so far were sold for whatever they could get.

Then, as the last couple finished finally sold, we were told to get a few subbys back on and finish plot 46. At which point, it is probably worth noting, the subbys were being offered half of what they were earning 18 months ago on a 'take it or leave it, there's a thousand more waiting to do it for whatever we're offering' basis.

In the background the bank is getting very worried about the massive loan it had provided for us to build a site for 250 houses. And it started insisting on payments being made and kept up to date - i.e. no leeway.

Then they called the loan in and the company went into receivership. A scenario that was played out all over the country.

That was my experience also. I think it will be even worse this time.

Share this post


Link to post
Share on other sites

FWIIW, the new build I am now renting I came to look at in 2000 and it was on the market for 135 to 150. The EAs told me that they had a list of over 30 people for each of these 3 bedroom new builds and I walked away. I looked up this house, and several other 3 bedroom houses on the estate, when I moved in and discovered, on houseprices, that all had been sold for 100K in 2000.

Share this post


Link to post
Share on other sites
Hi all,

I was curious as to what happened to the price of new builds in the last crash? Did the prices of such developments fall proportionately to the rest of the market or did they suffer more?

Regards,

Q

They crashed but it took a 3 to 4 year period to get the sort of drops we are seeing now . What I am seeing this time are 50% drops in a few months. The difference is last time more were bought for self ownership and more affordable in earnings ratio, and people fight tooth and nail to keep their own home. This time round its almost all BTL/speculator people have bought 4/5 off the plan hoping to make a quick buck and thus are being repossesed. Basically they have been greatly overpriced but have been driven up in price by pure GREED. As stated its when BTL start throwing the towel in huge numbers we are going to get unbelievable drops in prices

READ ARTICLE BELOW as an example when BTL/Speculator Companies start throwing in the towel its not like the odd property last crash but huge numbers coming on at once e.g 250 below

Buy-to-let firm in administration

Many new houses and blocks of flats have been built in Cardiff Bay

One of the biggest buy-to-let investment companies in Wales has gone into administration.

Cardiff-based A & A Property had more than 250 houses and flats on its books in different areas throughout Wales

http://news.bbc.co.uk/1/hi/wales/7267670.stm

Share this post


Link to post
Share on other sites
They crashed but it took a 3 to 4 year period to get the sort of drops we are seeing now . What I am seeing this time are 50% drops in a few months. The difference is last time more were bought for self ownership and more affordable in earnings ratio, and people fight tooth and nail to keep their own home. This time round its almost all BTL/speculator people have bought 4/5 off the plan hoping to make a quick buck and thus are being repossesed. Basically they have been greatly overpriced but have been driven up in price by pure GREED. As stated its when BTL start throwing the towel in huge numbers we are going to get unbelievable drops in prices

I think city center flats are going to be toast. But I don't think btl would have such a big impact on 3+ bedroom family homes. Most of them will be owner occupied and they will most likely sit tight if they can. Like you say such people would fight tooth and claw to keep their own home. For most it would just be a case of not being able to move a larger property with more space like a lot of families did over the last 5 years on the back of equity from their previous house.

Yes I think there will be falls accross the board ( with the odd excepted area that stays flat) but while flats will get the 50% falls quickly its going to be much slower for other housing types. And even then there won't be much to chose from.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 293 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.