The building will only continue when they have sold the flats!

Also there should be no argument about demand. If there is a demand for 2 bedroom flats, they will go like hot cakes!

I have to say this is the oldest trick in the book.... It's a classic way of a developer demonstrating that there is no demand. Look planners Scotchbrooks gave over their whole window and we still didn't sell any!

I say, drop your prices by ?70,000 and then see if you sell any.....

If the planners / inspectorate don't see through this there is no hope for us!

You can sell anything if you make the price low enough.

words of wisdom....

Not really.

While I don't doubt that the would be a healthy stream of buyers if they started selling the flats at ?120,000 that's not really how the economics of house builders works.

There will have been competition for this site. It is highly unlikely that they picked it up for a song and were set to make 50% profit on the flats if sold at the original prices.

They have basically been caught by the market turning against them. There's lots of comment on here about the prices relative to the averages locally but all this shows is how little development has taken place (otherwise you would be all too familiar with the premium that builders invariably charge for new properties) and how low average prices are in SE23.

They are never going to do anything other than pursue the option that is most economically advatageous to them, or as it now looks, the least economically disadavantageous, and it is bizarre that anyone should expect anything else.

Well, it looks like being another great SE23 success story...

Berkeley Homes could, of course, reduce the asking price for each flat down to the average price of comparable flats in SE23. This would require a drop of ?80-?100,000 in each unit meaning a loss of profit of between ?5m-?7m for the company.

Knowing what Berkeley Homes paid for the site, this would mean that the entire project would break even at best.

Of course, Berkeley Homes are not going to drop their prices in this way. It is currently impossible to know where or when the housing market is going to "bottom out". Who knows, even an ?80-?100,000 cut may not be enough - and no company can operate in a marketplace where selling price is so uncertain.

Far better to mothball the project, save building costs and wait for the market to recover or for the Chancellor's Autumn statement (in which they may be able to offload the flats for social housing at the taxpayer's expense).

The dispute over the number of 2 bedroom flats is, in part, a way of allowing Berkeley Homes a little more "wiggle room" to increase the number of units and therefore increase the possible overall profit. But it's far more a smokescreen to avoid saying what we all know - the project is now mothballed until further notice.

Good response nasaroc. I see in the back of papers all the time flats being built off plan are sold at a reduced rate or they have other incentives. This is to entice buyers who dont realise the walls are made of paper and the kitchen cupboard doors dont open because the fridge is in the way etc. Where as Berkeley slapped a price higher than the market value for an already completed flat?!

Now that they have mothballed the project and the likeliness of a 1 bed flat going for ?250k in the next 3 years is highly unlikely, can they put the road back and knock down the skeleton facade of which has now changed the face of the area?

We will be lucky if they complete the section 106 works.

See this link:
http://news.bbc.co.uk/1/hi/business/7583557.stm
Taylor Wimpey have lost ?1.54 billion in six months.

Conditions are challenging for builders.
Workers are being laid off.
Brick making kilns may be shut down.

But now we must wait for the planning application to be considered before anything more will be done.

What did they pay for the site.??

Is this information available on nethouseprice?

Just seen working lunch. Article about new houses not started but buyers not getting deposits back .
I found it incredible if you put a deposit down but then the devolper decides to delay building you cannot get your deposit back . Seems morally wrong.
Not only could they not get deposit back if they did walk away they would be liable for any difference in agreed selling price and actual price secured when eventually built and sold.
I feel very sorry for the few who have deposits on our skeleton

Never even thought of that aspect of things. That would be a shocking situation to be caught up in. Especially knowing that the plan for the building around you is changing slowly but surely until they get full occupancy.

Apparently the law totally on the side opf the devolper and at present no limit to time they can delay building. I will certainly never be putting down a deposit for a house/flat not 100% finished. In my opinion this is totally unjust.

Surely to do with the contract the buyer signed.

I would be very surprised if that's the full story re not getting deposits back. If it is, then agreed, sorry state of affairs but it will depend entirely on what's in the contract and from my (admitteldy vague) recollection of the Standard Conditions of Sale whether or not a deposit is refundable is generally dependent on whose fault non-completion is.

But apart frm anything else, why the hell would anyone exchange contracts on a building that hasn't even been started?! I understand that it's usual to put down a deposit to secure new builds but that is completely different to the formal exchange of contracts at a later stage down the line. The only event that constitutes a potential right to hold on to the deposit is the exchange of contracts. That's when it can get messy and there is a raft of case law on the subject.

Without knowing the facts of each individual case, it is pure speculation that developers are up to no good!

AFFM
as far as I could understand they just put a deposit down and cannot get it back despite the fact the builder ( Permision or something like that ) has not started a property that should now be finished and will not give a finishing date.
Seems amazing they could not get deposit back. Was GBP 10 k.
Maybe on Working Lunch Web Site , I will try

exchanging contracts (with say a 10% deposit) prior to practical completion is the norm - this is obviously different to putting down a ?1,000 deposit which reserves your plot, this may or may not be returnable.

The thinking is that in a rising market (last 10 years) you get in early and get a discount on the price mainly because you are helping the developers cashflow. Again, in theory, you would complete the purchase (having exchanged 3 - 6 months ago with a 10% deposit) once your unit was complete at which point you would of had six months groth etc and be able to (a flip the unit on at a profit or (b let it out depending on whether you were an investor or owner occupier.

There has been no perceived risk in buying off plan until now and as such I would imagine that people are being biten by it left right and centre. The reality is that once you have exchanged you either complete or lose your deposit - simple as that!

I just heard Scotchbrooks is closing down tomorrow.

I wouldn't be suprised if they now regret taking on the FHC project. I wonder if the closure is related to this?

Very sad if the case. I had dealings with the manager a few months ago and seemed a nice guy.
I thought it strange earlier this week when I mentioned that FHC has taken over 100% of window display. All other properties seemed to have vanished
Unfortunately could be the first of many