I understand the basic economics of supply and demand. But the properties being built by developers are not being sold cheaply at all – they are being sold at the market rate. The developer wants its slice of the action too, and t
he small flats and houses they are building rather than large detached houses are no more affordable to first-timers than the available pre-owned properties.
I live in an Essex town where a development of flats has been recently built in the town centre, overlooking the car park and adjacent to Tesco. Nice flats, admittedly, but still, overlooking the car park.
The flats are selling at prices from £350,000-£500,000 – not for first-time buyers, then. The people buying them are either doing so for investment, or are certainly not selling a property that is suitable for a first-time purchase.
There are newly built properties all over our town that are actually supporting higher prices, rather than driving them down. The problem is exaggerated when the poor people who bought them from the developer come to sell, and find that they have made little, or no, profit. What do they do? Charitably sell them at a loss? Of course not. Like the rest of us, they put them on the market at a price higher than the one they paid and hope that someone will eventually buy, which will not solve the problem.
What if, when we have used up all the green belt and the brown fill, the NHS has been crushed under the burden and our infrastructure is in ruins, our growing population gets fed up and escapes to European climes? Could we be left with empty properties all over the UK and staring at a countrywide economic crisis?
Kind regards
David Oastler
Partner
Mortgage Business
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