Before I go any further I do not welcome redundancies and job losses. It will be a traumatic time for anyone who has lost their job due to the credit crunch etc.
However it is a clear indication that the big developers are really struggling. The three biggies being Persimmon, Taylor Wimpey and Barrat Developments have shed 2,000 jobs between them.
So what does this mean for all of us?
Well most of the properties they build are sold to first and second time buyers. Now I do not mean to be insulting here but when it comes to making buying decisions on properties they are not the most cleverest. The reason being they are not in the industry so they do not take in to account square footage, build quality etc.
This is how these big builders and developers make their money. They basically sell small, minimum standard properties. They then get a smart interior designer to furnish 2 or 3 show apartments and houses with diddy furniture, get some pot pourri (I think that's how you spell it!) and brandish you with a lovely colour brochure.
They can have a full time sales staff for the whole year to try and flog the whole development. The reason they can do this is because the profit margins are HUGE! And when I say huge I mean huge. I reckon they make 100% on every property they sell.
So they build for £60,000 sell for £120,000.
Those days are over. First and second time buyers are staying well away. This bunch think prices will fall in line with whatever the tabloids think. So if the Daily Express, Observer, Mail or Mirror think house prices are crashing then they will stay away regardless of what the fundamentals show.
This is brilliant news. Developers now have to deal with the dreaded investor. The developer knows now the investor is not going to fall for any show apartments, slick sales team, glossy brochures or the smell of baking bread!
We want to know:
The discount - what real incentives are you going to give me? I want to buy your property with little or no money so make sure your discount starts with a "2" preferably with a "3" i.e. 30%.
The size - what is the cost per square foot? Is it in line with the surrounding area.
The rent - we want real rental figures, not inflated over ambitious figures.
Developers hate us as well as love us. We ignore the hype but we drive a hard bargain.
If you follow what I say here and want to get involved then get in contact. Tell me what you want. We are speaking with developers, sourcers, small time landlords who have got in to trouble and even banks and councils off loading 129 apartment Tower Blocks.
Fill out CLIENT REQUEST FORM
Posted on: 8th Jul 2008