Housing developments

[NIK]

I don't know what it's like in other areas but I have never seen so many housing developments in my life as there are currently going on in my area.
There must be at least twenty or more developments, some of them on old industrial sites are absolutely massive. Some are so huge that they will link up what were once separate areas. Whilst one that is apparently costing £350 million and will include retail, commerce, leisure as well as housing will be like another town centre when finished. At least going by the artist impressions.

Now what I don't understand is how - even before the economy went down the shitter and unemployment once again became a growth industry (I know the developments began before Covid) - people can afford to buy these properties.  The cheapest property on any of the developments seems to be around £295,000, and many are twice that. I realise that is a pittance for London and the South East, but the few jobs being advertised seem to be around £25,000 and many just £18,000, which is around the minimum wage. How on earth can people, even with two working and maybe bringing in £70,000 at the most, and in most cases much less, ever afford such properties?

I have noticed on many recently completed modern developments within a couple of years the 'for sale' signs mushrooming, so maybe they can't!

[daviemac]

I don't know what it's like in other areas but I have never seen so many housing developments in my life as there are currently going on in my area.
There must be at least twenty or more developments, some of them on old industrial sites are absolutely massive. Some are so huge that they will link up what were once separate areas. Whilst one that is apparently costing £350 million and will include retail, commerce leisure as well as housing will be like another town centre when finished. At least going by the artists impressions.

Now what i don't understand is how - even before the economy went down the shitter and unemployment once again became a growth industry (I know the developments began before Covid) - people can afford to buy these properties.  The cheapest property on any of the developments seems to be around £295,000, and many are twice that. I realise that is a pittance for London and the South East, but the few jobs being advertised seem to be around £25,000 and many just £18,000, which is around the minimum wage. How on earth can people, even with two working and maybe bringing in £70,000 at the most, and in most cases much less, ever afford such properties?

I have noticed on many recently completed modern developments within a couple of years the 'for sale' signs mushrooming, so maybe they can't!

People buy them 'off plan' as an investment, then sell them on for a profit after they are built.

[NIK]

People buy them 'off plan' as an investment, then sell them on for a profit after they are built.

Is this common? What if they can't sell?

I also looked into 'help to buy' schemes. They don't seem that helpful, and are certainly not for oldies.

[Kev40ish]

People buy them 'off plan' as an investment, then sell them on for a profit after they are built.

Totally agree.. the chinese money has switched from Canary Wharf and central London as They can buy 3 flats for the same money and stamp duty costs are less.
Russian money buys flats everywhere also as an investment

[bhudda]

People buy to let ?

[daviemac]

Is this common? What if they can't sell?

I also looked into 'help to buy' schemes. They don't seem that helpful, and are certainly not for oldies.

What if the shares one invests in drop in value, what if savings rates take a tumble, what if one gets made redundant, what if one gets run over by a bus, feel free to continue with as many 'what if's' as you like. 

All investments pose a risk to some degree.

People buy to let ?

That's another one.

[Squire Haggard]

I have objected to some urban sprawl schemes going ahead. I would hesitant about buying new build these days, after the pubicity they have been getting.

New build horror stories.....

External Link/Members Only

Cunt.
Persimmon boss and £75M bonus, aided by 'help to buy' scheme......

External Link/Members Only

[jeanphillipe]

man the build quality of these developers is Poo,

i've seen persimmon properties they have such tiny rooms !

[sir wanksalot]

It's true there are a lot of wealthy investors around.

I also believe the Help to Buy Scheme only applies to new builds so many people are putting 5% deposit down to secure a new build. God knows how they pay the mortgage though 

[chrishornx]

All investments pose a risk to some degree.
.

I suppose that depends on the definition of risk

[daviemac]

I suppose that depends on the definition of risk

As per the dictionary definition, "the possibility of something bad happening".  How bad the 'something' might be or the effect it may have is a different mater. Nothing in life is totally risk free.

[chrishornx]

As per the dictionary definition, "the possibility of something bad happening".  How bad the 'something' might be or the effect it may have is a different mater. Nothing in life is totally risk free.

Premium Bonds hold no discernible risk nor do Certificates of Deposit underwriter by the FDIC

 fixed rate US treasury backed annuities also carry no risk - certainly they don't offer the best returns but the risk has gone

clever people could argue that they still 'carry risk' as they may not be paid if  a meteor hit the planet but that would be a little abstruse

[Yankee21]

Is this common? What if they can't sell?

I also looked into 'help to buy' schemes. They don't seem that helpful, and are certainly not for oldies.

yes, I do it.

Battersea/vauxhall new builds - I'd say 60% are sold this way.
Do your homework before sell on etc.

Croydon for example will have a new shopping centre in next few years, the 'Cronx' with decent links into centre of town will be the next area I invest in.

[daviemac]

Premium Bonds hold no discernible risk nor do Certificates of Deposit underwriter by the FDIC

 fixed rate US treasury backed annuities also carry no risk - certainly they don't offer the best returns but the risk has gone

clever people could argue that they still 'carry risk' as they may not be paid if  a meteor hit the planet but that would be a little abstruse

If you want to think life has no risk the carry on, What happens to all your 'risk free' investments that nobody knows about when you get run over and killed.

Now that was rhetorical question (one that doesn't require a reply) so I'll leave you too it ,I can't be bothered with those who insist on being pedantic despite knowing full well what was  meant by the original statement.

[GreyDave]

Is this common? What if they can't sell?

I also looked into 'help to buy' schemes. They don't seem that helpful, and are certainly not for oldies.

I worked until this bloody covid nosense in refitting flats and rental properties.

New build ...you will be shagged right up the arse with no lube ...   they are all shite mostly stud walling this includes the exterior wall on flats I looked at a nearby complex of 4 tower blocks 8 stories high all with stud exterior walls insulated with Kingspan ????? WTF is happening with Building control and regs ??  and all done by jobbing trades men whos level of English is " No problem " and they all piss off back when theres a problem ....oh dont worry they wernt on the book of our firm ...just a suby contract firm set up to protect and sheild main developer FFS..

Right reason for my reply is most people of the age of 50 even if thick have  an idea how to work out if its a good deal of not thats why if over 50 they wont give you time of day...

If they can understand the deal you are giving ,,,, then you are saying wrong ,,,, was what an old bank manager mate told me about finance deals,,,,

[chrishornx]

If you want to think life has no risk the carry on, What happens to all your 'risk free' investments that nobody knows about when you get run over and killed.

Now that was rhetorical question (one that doesn't require a reply) so I'll leave you too it ,I can't be bothered with those who insist on being pedantic despite knowing full well what was  meant by the original statement.

my observations were in response to the comment ' All investments pose a risk to some degree.' not to life in general where clearly there are risks

[daviemac]

my observations were in response to the comment ' All investments pose a risk to some degree.' not to life in general where clearly there are risks

Now that was rhetorical question (one that doesn't require a reply) so I'll leave you too it ,I can't be bothered with those who insist on being pedantic despite knowing full well what was  meant by the original statement.

[chrishornx]

Well that's a relief

[willie loman]

People buy them 'off plan' as an investment, then sell them on for a profit after they are built.

that was popular for a while that is true, cant see much chance of selling on properties and making a profit in the next 18 months, i imagine they will be let out.

[daviemac]

that was popular for a while that is true, cant see much chance of selling on properties and making a profit in the next 18 months, i imagine they will be let out.

Yeah, I would imagine there will be some who will end up stuck with properties not yet complete but they agreed to buy prior to COVID.

[Malvolio]

Premium Bonds hold no discernible risk nor do Certificates of Deposit underwriter by the FDIC

 fixed rate US treasury backed annuities also carry no risk - certainly they don't offer the best returns but the risk has gone

clever people could argue that they still 'carry risk' as they may not be paid if  a meteor hit the planet but that would be a little abstruse

The risk with premium bonds is that your rate of return is less than inflation, so you stand a chance of losing money in real terms.

[daviemac]

The risk with premium bonds is that your rate of return is less than inflation, so you stand a chance of losing money in real terms.

FFS don't start him off again,    There are quite a few that are basically savings schemes that carry very low risk compared to investment in property, stocks and shares and such like.

[scutty brown]

Well....if the houses remain unsold, maybe they could be compulsory purchased by the council and used for housing refugees.
Should be able to fit six or seven in a three bedroom house

[chrishornx]

FFS don't start him off again,    There are quite a few that are basically savings schemes that carry very low risk compared to investment in property, stocks and shares and such like.

if an ordinary contributor talked about a moderator in such terms they would be in trouble

[daviemac]

if an ordinary contributor talked about a moderator in such terms they would be in trouble

I'm subject to the same rules as anyone else so if you don't understand that it was a joke, hence the sarcastic emoji, then report it.

BTW people have said a lot worse to me during discussions without any problems.

[sir wanksalot]

BTW people have said a lot worse to me during discussions without any problems.

Are we able to test the boundaries? 

[daviemac]

Are we able to test the boundaries? 

Of course, many have.   

[Ali Katt]

I don't know what it's like in other areas but I have never seen so many housing developments in my life as there are currently going on in my area.
There must be at least twenty or more developments, some of them on old industrial sites are absolutely massive. Some are so huge that they will link up what were once separate areas. Whilst one that is apparently costing £350 million and will include retail, commerce, leisure as well as housing will be like another town centre when finished. At least going by the artist impressions.

Now what I don't understand is how - even before the economy went down the shitter and unemployment once again became a growth industry (I know the developments began before Covid) - people can afford to buy these properties.  The cheapest property on any of the developments seems to be around £295,000, and many are twice that. I realise that is a pittance for London and the South East, but the few jobs being advertised seem to be around £25,000 and many just £18,000, which is around the minimum wage. How on earth can people, even with two working and maybe bringing in £70,000 at the most, and in most cases much less, ever afford such properties?

I have noticed on many recently completed modern developments within a couple of years the 'for sale' signs mushrooming, so maybe they can't!

Most of them near me are student "villages". Good for landlords as they can only need to fit one kitchen for 6 people and they can charge a big rate for a 9 month contract, bad for anyone who isn't a student and needs housing.

[sub_marine]

Over the last 20 years the supply of housing hasnt kept up with population growth, so the average age of first time buyers has went up by 10 years.  A lot of these first time buyers have retired parents who will supply a chunk of cash for a deposit, plus many of them have also been living at home & saving for extended times.  Banks are also back to 4x salary mortgage deals, and certain jobs like doctors and dentists get 5x.  The government also has some sort of LISA which is like an ISA so tax free and the government tops it up by 25% when you use the cash to buy a house.

If you go round one of these estates once it is built, you'll be surprised at the ammount of nearly new cars in the driveways, so its obvious the banks are keen to loan cash at the moment

[PatMacGroin]

Where "buy-to-let" was one of the most popular investment models of the past 20-40 years, that is quickly being overtaken by "build-to-let". However, this is being done by the large construction companies in collaboration with large investment corporations. Meaning it's not really as much of an option for the "mom and pop" 2nd home investors that fuelled that original gold rush.

Some of these "build-to-lets" are being done totally out in the open. From initially planning stages it's clear that the investment firms are bank rolling the development with the intention of renting the bulk of the properties produced. There are others where it's done in a more circumspect way. The investment companies loan the money to the building contractors. Then swathes of the developed properties are bought back from the construction company, in batches using various shell companies. Those purchases set the valuations for the proportion sold on the open market. Which helps to justify the rental valuations for the properties they hold onto. (The arrangement also allows the developments to side step some of the affordable housing planning regulations.)

Additionally, those sales records ensure the whole development has a substantial asset valuation which can be used as leverage for further borrowing and investment into other similar schemes. Borrowing which is easily covered by the rents being received. Plus they still have the assets, which, if necessary, can be sold off in 10-15 years after already making a nice earning off them. Basically the same mechanism which allowed some small investors to grow into buy-to-let property magnates, but this time being done on an industrial scale by people that are already very wealthy to begin with.

[paper7]

I don't know what it's like in other areas but I have never seen so many housing developments in my life as there are currently going on in my area.
There must be at least twenty or more developments, some of them on old industrial sites are absolutely massive. Some are so huge that they will link up what were once separate areas. Whilst one that is apparently costing £350 million and will include retail, commerce, leisure as well as housing will be like another town centre when finished. At least going by the artist impressions.

Now what I don't understand is how - even before the economy went down the shitter and unemployment once again became a growth industry (I know the developments began before Covid) - people can afford to buy these properties.  The cheapest property on any of the developments seems to be around £295,000, and many are twice that. I realise that is a pittance for London and the South East, but the few jobs being advertised seem to be around £25,000 and many just £18,000, which is around the minimum wage. How on earth can people, even with two working and maybe bringing in £70,000 at the most, and in most cases much less, ever afford such properties?

I have noticed on many recently completed modern developments within a couple of years the 'for sale' signs mushrooming, so maybe they can't!

The builders/investors are going to get their fingers badly burnt when the first tranche of endowment mortgages reach maturity and the endowments fall well short of the figure required to pay the loan off, what happens then? In my opinion, together with this C-19 and all the financial trouble anybody who has a mortgage will be in it up to their necks through no fault of their own.

[sir wanksalot]

Where "buy-to-let" was one of the most popular investment models of the past 20-40 years, that is quickly being overtaken by "build-to-let". However, this is being done by the large construction companies in collaboration with large investment corporations. Meaning it's not really as much of an option for the "mom and pop" 2nd home investors that fuelled that original gold rush.

Some of these "build-to-lets" are being done totally out in the open. From initially planning stages it's clear that the investment firms are bank rolling the development with the intention of renting the bulk of the properties produced. There are others where it's done in a more circumspect way. The investment companies loan the money to the building contractors. Then swathes of the developed properties are bought back from the construction company, in batches using various shell companies. Those purchases set the valuations for the proportion sold on the open market. Which helps to justify the rental valuations for the properties they hold onto. (The arrangement also allows the developments to side step some of the affordable housing planning regulations.)

Additionally, those sales records ensure the whole development has a substantial asset valuation which can be used as leverage for further borrowing and investment into other similar schemes. Borrowing which is easily covered by the rents being received. Plus they still have the assets, which, if necessary, can be sold off in 10-15 years after already making a nice earning off them. Basically the same mechanism which allowed some small investors to grow into buy-to-let property magnates, but this time being done on an industrial scale by people that are already very wealthy to begin with.

that's interesting and I don't mean that in a sarcy way!

[Mr Sinister]

Where "buy-to-let" was one of the most popular investment models of the past 20-40 years, that is quickly being overtaken by "build-to-let". However, this is being done by the large construction companies in collaboration with large investment corporations. Meaning it's not really as much of an option for the "mom and pop" 2nd home investors that fuelled that original gold rush.

Some of these "build-to-lets" are being done totally out in the open. From initially planning stages it's clear that the investment firms are bank rolling the development with the intention of renting the bulk of the properties produced. There are others where it's done in a more circumspect way. The investment companies loan the money to the building contractors. Then swathes of the developed properties are bought back from the construction company, in batches using various shell companies. Those purchases set the valuations for the proportion sold on the open market. Which helps to justify the rental valuations for the properties they hold onto. (The arrangement also allows the developments to side step some of the affordable housing planning regulations.)

Additionally, those sales records ensure the whole development has a substantial asset valuation which can be used as leverage for further borrowing and investment into other similar schemes. Borrowing which is easily covered by the rents being received. Plus they still have the assets, which, if necessary, can be sold off in 10-15 years after already making a nice earning off them. Basically the same mechanism which allowed some small investors to grow into buy-to-let property magnates, but this time being done on an industrial scale by people that are already very wealthy to begin with.

Why there needs to be a land reform for the public, far too much of it is owned by developers, foreign investors and of course some lucky sod who was born into the right family.

Housing as a commodity if shit for society and only getting worse globally. One day it will all be owned by investment corporations unless something is done to change this.