Volume Housebuilders no longer want to build in Volume

Building has some interesting research

An analysis by Building of the most recent full-year results from the eight major publicly listed housebuilders, shows that while pre-tax profits rose by 161% in 2011 to £556m on the previous year, the number of homes built increased by just 3% to 45,018. Operating profits also rose 47% over the same period.

What is happening?  In large part the change is due to the large housebuilders, we can no longer call them volume housebuilders, have shifted to the high margin, small number of units, cherry picked, large houses, low risk, high end of the market and away from the high risk low cost end of the market.

The question is whether if with a resumption of confidence and mortgage lending they are able to resume volume building?

If they cannot, and with the heavy weight of sites on their balance sheets they paid way too much for they may not be able to, then if at some point we did have a proper ‘plan b’ of major investment in housing including social housing, we have to ask who can.  We need to start thinking about alterative volume housing delivery models now so they are ‘shovel ready’ when plan B does eventually come – as it might in a panic at very short notice.

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About andrew lainton

International Urban Planner

Posted on May 25, 2012, in Affordable Housing, Housing, urban planning. Bookmark the permalink. 2 Comments.

  1. Surprise, surprise! – People want to live in ‘good’ areas, where there are ‘good’ jobs, ‘good’ schools, ‘good’ shops AND they feel safe!

    These ‘good’ areas don’t want any more houses – let alone affordable housing!

    ‘Tree-huggers’, ‘Nimbys’ and ‘followers of the bandwagon’ join forces to persuade the planners to refuse planning applications.

    Forcing a situation of Planning by Appeal…..

    No wonder the “volume house builders” are re-directing their interests

    Will the NPPF address this matter? I doubt it!

  2. In NW5, the sale of family silver continues. The local authority has one idea – to sell off as much of its commercial property estate as possible. Why? To pay for its housing maintenance liability, apparently. And the eager buyers are – housing businesses. They know full well that change-of-use consent is implicit in the sale. Firewalls – my a**e!. The most recent sale around here is a relatively small site to – as your blog piece suggests it might be – a volume housebuilder.

    Reading Jeb Brugmann at moment. His excellent schtick about the dead-hand of corporate+government urbanism that has established a production and management system for our cities that utterly disenfranchises native commercial instincts applies in spades here. We’re left with 60s and 70s housing estates and streets of 19th C terracing politically fenced off with Conservation Area designation.

    The mix and amount of business which used to be here has been almost completely removed. The tie up between the housing monsters (the “more-sites-like-this” brigade) and the local authority is numbing: a whole cadre of revolving door types now exists, all of them arguing the same lifeless urbanism, arguing their right to form the city according to their dead, economically one-trick notion.

    The volume housebuilders, the housing associations, the local authority and the mindless local politicians haven’t got an interesting idea between them. They are quite clueless about the need to develop an urbanism of economic opportunity: not a purely extractive urbanism.

    I don’t know who brought these people up. I had no idea the country was capable of producing so many ethically challenged twats.

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