Anecdotal from Uncle Tom, comment 11 at HPC:
The mood is definitely changing. In my local pub yesterday lunchtime, small group of young couples talking, all currently renting (I think). Decent people. One of them is a builder, and another asked the question 'so how much does it actually cost to build a house like that?' (referring to a cheaply built and small 1970's 3 bed estate house).
The answer came back as £35 - £40k. And then they all got angry. Why, they protested, should they have to pay five times that amount?
If you think about it, prospective FTB's have been incredibly fatalistic about house prices over the last decade - they havn't protested, havn't campaigned for cheaper homes - not vocally, anyway... perhaps that's changing. Maybe the focus will change from what people can afford, while loading themselves with immense debt; to what they ought to have to pay.
Monday 19 July 2010
Bricks And Mortar Fun
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8 comments:
Without including the cost of land and other factors the argument is meaningless. Typical of most people making a judgement without being in receipt of all the facts.
The markup on homes is an utter disgrace and is what the financiers have been pushing for a long time now, along with the more recent sub-prime biz.
This strikes me as an interesting thing to get out there (maybe with some nice infographics). How much of the house you're buying is actually "bricks and mortar".
Have you seen this bullshit?
http://www.bbc.co.uk/news/uk-scotland-10687718
To you, maybe; to me, it means that £35 -£40K is the cost of the house, the rest is the cost of the plot. Why should the plot cost so much more than the bricks and mortar standing on it?
IIRC, even as late the 1960's a house in bad condition could be practically worthless: the plot was worth next to nothing and the bricks and mortar could cost as much to repair as to rebuild.
A, the builder probably meant direct labour and material costs. Once you add the cost of a few yards of road, pavement, a quarter of a street light, connection to utiliities, a bit of architect's fees and salary/profit for the builder, we can double that cost to £70 - £80k.
The rest is 'land values' i.e. pure profit for a monopolist. It is important to 'raise awareness' about this.
JH, but it is not the builder's profit margin, it is the landowner's profit margin at the time planning is granted. If the builder IS the landowner when planning is granted, he has already made the bulk of the overall profit at the least risk and hassle.
And of course the landowner's monopoly profit is inflated by bankers for their own nefarious ends, knowing that the government will bail them out if it goes wrong.
JT, I did those a while back.
RR, of course the NHF are hamming things up, but there is still some truth in it. Far better all round not to have flogged off the council housing.
B, exactly - only it has happened since then as well. In relative terms, houses were cheapest of all in the early-mid 1990s, the houses i bought then cost less than their rebuild costs (as defined above).
A, the builder probably meant direct labour and material costs. Once you add the cost of a few yards of road, pavement, a quarter of a street light, connection to utiliities, a bit of architect's fees and salary/profit for the builder, we can double that cost to £70 - £80k.
... and the enforced contribution to 'social housing' and 'amenity projects' etc - which applies to every single new build these days, even if it's only one house. Apparently new rules came in last year which have, also apparently (according to our local grapevine), destroyed many small building firms that would have built one or two houses at a time.
MRs R, I didn't include all that nonsense in the £70 - £80k figure as it's difficult to quantify.
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