Interesting Links for 18-05-2012

[andrewducker]

• Number of completed homes in 2011 less than half what is required to meet demand. Can we not just build some? Infrastructure = good.
  (tags: housing uk )
• Comics companies - still making it hard to work out what you should be giving them money for.
  (tags: EpicFail business comics )
• So, you think reason guides your politics? Think again
  (tags: bias belief politics )
• Accuracy takes power: one man’s 3GHz quest to build a perfect SNES emulator
  (tags: emulation consoles nintendo )
• Parents experience greater happiness and meaning in life
  (tags: psychology happiness parents )
• Strange Pictures of Hot Men
  (tags: sexy photographs men )
• Ovulating women perceive sexy cads as good dads
  (tags: hormones menstruation parents perception sex )
• Sacha Baron Cohen was banned from filming at UN for fear of upsetting dictators
  (tags: SachaBaronCohen movies dictators UnitedNations )

Comments

[andrewducker]

Yup. Two blocks near us that have done likewise.

I wonder if what we need is a way to make housebuilding cheaper.

I have heard that our planning permission system adds a fortune onto the cost of building homes, but I can't dig anything up about it right now.

[a-pawson.livejournal.com]

The costs of the actual materials and labour have risen, not only but because modern houses are built to higher standards than they were a few years ago. But I believe the biggest variable cost is the land, the cost of which is probably directly linked to the price the builders can sell the houses for. This is why building sites are being mothballed. The building costs have not risen particularly, but the builders have paid out too much for the land to enable them to sell the houses at a profit. Until they can sell houses their cash is tied up.

[pete stevens (from livejournal.com)]

It's worse than that. Suppose you've paid $x to buy enough land to build $n houses that will sell for $y each and have a building cost of $z each. Your profit is $n($y) - $n($z) - $x. Your land is valued at $x/$n.

Now if you go and sell one house under price at $y-$d, your profit is now.

$n($y -$d -$z) - $x.

More importantly your land is now valued per plot at

$x/$n - $d.

because the act of selling one house revalues all of them.

If this is less than the outstanding loan or the conditions on the loan you've just defaulted and your land gets repossessed and all the penalty terms will destroy your business. So a sane plan is to leave the land empty and hope the price rises enough before you run out of money paying the interest.

This is why builders will do anything to get the value listed in the land registry as the list price of the house, even if it involves a special mortgage which happens to be interest free for the first 20 years and the free deposit comes out of the marketing budget and definitely doesn't revalue the land.