Today on the BBC news website, there is an article called:
" Housing gloom 'worst in 30 years' "

What do you think of this article ?

(I am not allowed to post the link to the BBC page, since I am a new user of the forum but if any older member would like to post the link it would be great)

http://news.bbc.co.uk/1/hi/business/7346564.stm

Here you go.

I won't say what I think of the article, because the articles says it all.

It doesn't relate to S6 though, apparently.

http://news.bbc.co.uk/1/hi/business/7346564.stm

Here you go.

I won't say what I think of the article, because the articles says it all.

It doesn't relate to S6 though, apparently.

Here we go again. As has been stated before S6 is a large area. An average means some are above some are below some are status quo. You dont seem to get this concept. Or is it just because it doesnt fit in with your doom and gloom story?

Here we go again. As has been stated before S6 is a large area. An average means some are above some are below some are status quo. You dont seem to get this concept. Or is it just because it doesnt fit in with your doom and gloom story?

of course Phylis, when AVERAGE prices in S6 were going up, you were always there explaining your concept of averages to point out that prices in S6 hadn't really gone up weren't you?

do you have 'doom and gloom' set as a function key on your keyboard? you type it so often, you ought to - it would save you loads of time.

If you read the article, it actually states that housing gloom is as low as it has been since they started to measure it 30 years ago. It may well be as gloomy as it ever has been ever, which is a thought.

of course Phylis, when AVERAGE prices in S6 were going up, you were always there explaining your concept of averages to point out that prices in S6 hadn't really gone up weren't you?

do you have 'doom and gloom' set as a function key on your keyboard? you type it so often, you ought to - it would save you loads of time.

Possibly because it is all you ever talk about. Have you ever posted a happy piece of text or are they all about losing money.

Have you ever posted a happy piece of text or are they all about losing money.

house price falls make quite a few people happy actually, especially those that didn't overstretch themselves during the boom and have saved a decent deposit and won't have to rely on a 100%+ mortgage.

house price falls make quite a few people happy actually, especially those that didn't overstretch themselves during the boom and have saved a decent deposit and won't have to rely on a 100%+ mortgage.

They also make the majority very unhappy. Nobody likes losing money hence the raft of houses on the market at the minute. Saving isnt an option for some people. High rents and costs of living wipe out some peoples wages with nothing left in the pot at the end of the month. These people may well be able to pay their rent but will never have enough savings for a deposit on a house. Why should they not be given the chance to own a home of their own.

They also make the majority very unhappy. Nobody likes losing money hence the raft of houses on the market at the minute. Saving isnt an option for some people. High rents and costs of living wipe out some peoples wages with nothing left in the pot at the end of the month. These people may well be able to pay their rent but will never have enough savings for a deposit on a house. Why should they not be given the chance to own a home of their own.

I think you've just proved his point actually....renters that want to buy will be blissfully happy at the prospect of a bargain.

I think you've just proved his point actually....renters that want to buy will be blissfully happy at the prospect of a bargain.

My point being that they cant as the end of the high LTV mortgages has gone. Most renters cant afford a 20-25% deposit and never will.

My point being that they cant as the end of the high LTV mortgages has gone. Most renters cant afford a 20-25% deposit and never will.

Then prices will fall until they are at a level that FTB's or renters WILL be able to afford the deposits for. Simple supply and demand.

http://www.timesonline.co.uk/tol/comment/columnists/alice_miles/article3768099.ece?Submitted=true

quote

"Scandal of luring first-time buyers - Gordon Brown is acting immorally by asking for rate cuts that could lead to negative equity"

Then prices will fall until they are at a level that FTB's or renters WILL be able to afford the deposits for. Simple supply and demand.

That is a good point sham71. One of the real problems of recent years has been the inflation in land value and construction costs. Despite what some people think, developers are still in a competitive market and they have to work to minimum profit margins to make new schemes viable, typically around 15%.

I know of firms that have withdrawn from the Sheffield market because of land price inflation and they also have to cope with build costs that have more than doubled in the last ten years. We all know that there is a housing shortage in the UK but those two items are key to creating affordable new homes which will in turn re-energise the starter sector of the market.

For now many land banks are over-inflated but that will lessen in time, and land owners that are selling now will have to accept that the days of million pound back gardens are well and truly over for the time being. I don't think that it will take too long because demand for housing is there and (ironically) is growing as markets stagnate. I firmly believe that my 'four point plan' (remember that?;)) will start to come together this year as the institutions find ways to get money back into the market.

Despite what some people think, developers are still in a competitive market

unless they are quoting for the public sector......sorry couldn't resist.

but on a serious note, do you not think its possible that there might have been some price fixing in the residential housing market?

Hmm, it's an interesting question. On the whole I don't, but that depends on what you mean by 'fixing'. Most markets work in the same way and people share consultants, contractors, agents, and even staff so of course there is cross referencing of information of ideas and knowledge. I don't think that is anti-competitive in itself, after all a Mars Bar costs pretty much the same wherever you go doesn't it?

The recent FTO investigation is an odd one in all honesty because the majority if the contractors on there (and I know a fair few of them) are just old fashioned firms putting up buildings like they have for years.

The main problem with that case is that that when working for the public sector you are almost obliged to submit a price because if you don't you don't get on the next tender list. Therefore if you are too busy or for some other reason not interested in that particular job you might submit a cover price that you know is too high to save the cost and expense of completing a full tender that might take 3/4 man weeks for no point. In my view some of the blame there is with the public bodies and their procurement methods. I'm going off topic a bit here but I hope it helps to enlighten the reasons for some practices. Cover pricing is certainly not unique to the construction industry.

House building is a little less competitive in that it is very location specific rather than project specific so the local market vagaries, comparables, quality of product and other factors come into play a lot more than if you are simply submitting a tender for an identical job. So, on balance I would have to say that the housing market is pretty transparent in sale price terms.

The press have made a big thing of the 'bid rigging' but there are only 9 cases of the 121 investigated. Still bad enough though and the companies should be hammered for it, presume it is on the mega PFI or Olympic contracts where you only get 2/3 bidders. The rest is 'cover pricing' - putting in a high figure cos you don't want the work but not wanting to upset the client at the same time.
It doesn't apply to private housing, the blame for high house prices is not that simple.
Tony, you obviously have experience of working with contractors - are you a QS?

The press have made a big thing of the 'bid rigging' but there are only 9 cases of the 121 investigated. Still bad enough though and the companies should be hammered for it, presume it is on the mega PFI or Olympic contracts where you only get 2/3 bidders. The rest is 'cover pricing' - putting in a high figure cos you don't want the work but not wanting to upset the client at the same time.
It doesn't apply to private housing, the blame for high house prices is not that simple.
Tony, you obviously have experience of working with contractors - are you a QS?

The whole system leads to this rigging of prices. All of the companies involved are on the governments preffered contractor list. To stay on this list they have to submit prices for pojects. If they are exceptionally busy at the time a tender enquiry comes in they hike up the price so they dont get the job.

In the majority of cases the word 'rigging' is nowhere near to the truth though Phylis. Contractors haven't magically stopped submitting prices for jobs that they don't want, they now just guess a cover price and make sure that it is too high to win. The clients are no better off than before.

The OFT is now being taken to task for exaggerating their claims and allowing the press to make wild and fanciful claims that do not even closely reflect the reality.

So that's yet another Government quango that seems to have screwed up.