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peahead

Redrow 'protect' Your House Price!

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Anyone else receive a flyer this week from Redrow - if you buy one of their new builds and sell it in 3 years but can't get back what you paid for it, they will give you the difference (up to 10%)... what if you are in huge NE in 3 years and can't afford to sell? Anyone think that prices won't fall more than 10%? Love to see the T&Cs for this deal! I'm not convinced Redrow will even still be trading in 3 years!!

:lol:

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Anyone else receive a flyer this week from Redrow - if you buy one of their new builds and sell it in 3 years but can't get back what you paid for it, they will give you the difference (up to 10%)... what if you are in huge NE in 3 years and can't afford to sell? Anyone think that prices won't fall more than 10%? Love to see the T&Cs for this deal! I'm not convinced Redrow will even still be trading in 3 years!!

:lol:

http://www.redrow.co.uk/reassure/house_price_protection/

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Anyone else receive a flyer this week from Redrow - if you buy one of their new builds and sell it in 3 years but can't get back what you paid for it, they will give you the difference (up to 10%)... what if you are in huge NE in 3 years and can't afford to sell? Anyone think that prices won't fall more than 10%? Love to see the T&Cs for this deal! I'm not convinced Redrow will even still be trading in 3 years!!

:lol:

As far as i'm concerned, this is just another cynical pricing / marketing trick. Rather than paying the deposit or offering furnishings, they are offering this.

In fact, it's probably less of a risk than offering a straight out 10% discount at sale as there is the probability that most people won't try and sell within 3 x years.

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They probably know that prices will fall a lot more than 10% in the next three years, so many wouldn't even be able to exercise the option due to the 10% limit.

There'll be all sorts of conditions that will allow them to wriggle out of paying up. Other financial 'products' will probably also need to bought from Redrow in order to qualify.

On the other hand, if Home owners are made able to exercise the option to compensate for up to a 10% difference, the option convexity actually encourages the home owners to sell at the low-to medium range of price falls (say 5% to 30%). More supply at lower prices, brilliant :). Its simple, the home owners with the option may find it convenient to cash in the option and move to a better house, say (if they can).

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Big builders can probably lower their prices and still make profits. When I mentioned the falling market to a developer who's about to start a major mixed residential / retail development, he didn't disagree with me, but was said that the first houses wouldn't be finished until 3 years' time, at the earliest, and nobody could predict the market that far ahead anyway. Sort of true, I guess!

Edited by conifer

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Anyone else receive a flyer this week from Redrow - if you buy one of their new builds and sell it in 3 years but can't get back what you paid for it, they will give you the difference (up to 10%)... what if you are in huge NE in 3 years and can't afford to sell? Anyone think that prices won't fall more than 10%? Love to see the T&Cs for this deal! I'm not convinced Redrow will even still be trading in 3 years!!

:lol:

House bashers effectively build in an 'incentitive' in to all sales. This can take the form of carpets, white goods, stamp duty, 5% deposit etc.

I am currently working closely with all the major housebuilders. Over the last 3 months this incentive has been approx 10% across all builders - so therefore this 10% negative equity trick having looked at the t & c's replaces all the incentive they would offer to anyone who asked anyway.

The intresting thing is that alot of the builders are now offering incentive schemes of 12 - 15%. They will do anything to avoid offering a direct discount that can show on LR.

I have a schemes down in Peterborough and Leicester in which all the developers have withdrawn the 5% deposit paid schemes. Interesting one of the Barratts management team stated that this was due to the reporting of figures to the land registry and the fact that 95% mortgages no longer exist.

There are now major redundcies in all the housebashers with most future schemes mothballed until existing schemes have sold out.

BB

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  • 295 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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