• Issue 43

  • Dec 2018

The Source


NHBC new home registration figures confirm November is a top month

The latest figures from NHBC showed that new homes registration in November, totalling 15,155, was the second highest monthly total of 2018, meaning a 2% increase year-on-year

This breaks down to 11,135 private sector new homes (11,017 in November in 2017), with affordable sector new homes at 4,020 (3,785 this time last year.).

Total new home registrations in the rolling quarter, September to November, rose to 43,745 new homes against the same period last year, an increase of 7%; of this, private registrations were up 6% to 33,104 whilst those in the affordable sector grew to 10,641, a rise of 10%.

Year-on-year new home registrations, during this rolling quarter, saw 9 of the 12 UK regions seeing significant growth, with Yorkshire & Humberside, Wales and the South West seeing increases of +43%, +34% and +21% respectively. However, registrations in London dropped by 16% and 11% in the West Midlands.

Steve Wood, CEO at NHBC, said: “As we reach the end of the year it is reassuring to see continued strong new home registration numbers, with growth across the majority of the UK. Looking ahead to 2019, NHBC will continue to support the country’s house-building industry to deliver more, high quality new homes for consumers.”

Berkeley increases pre-tax profit guidance

As a result of continuing to deal with a market that “lacks urgency”, the Berkeley Group has only delivered 2,027 homes during their financial half year (six months to October 31st 2018), compared to 2,190 in the same period last year.

Berkeley has increased its pre-tax profit guidance for the current full financial year, by more than 5%, with the full year split between the first and second half expected to be similar to 2017, “reflecting resilient trading in the period”.

Average selling price increased to £740,000 (2017: £721,000), which Berkeley said reflected the mix of properties sold in the period.

Pre-tax profit saw a decrease of 27.5, dropping to £401.2 million, down on the £539.9 million achieved last year. Revenue was just slightly down to £1,653.4 million (2017: £1,664.5 million) with this being driven mainly by residential sales revenue of £1,513.7 million (2017: £1,597.1 million). Since April, cash due on forward sales has also dropped from £2.2 billion to £1.9 billion.

The company’s statement read: “This reflects a market in London and the south east that lacks urgency. Pricing and cancellation levels are stable but underlying demand is constrained by a combination of macro uncertainties and policy interventions.”

Berkeley’s CEO, Rob Perrins, said: “Berkeley has had a good start to the year and this is reflected in our guidance which is increased for the full year, and reaffirmed for the next two years, based upon current market conditions. This is in the context of a short term outlook that is clearly uncertain due to the ongoing Brexit process and a number of headwinds in the operating environment in London and the south east.”

Berkeley Chairman, Tony Pidgley, added: “We are seeing opportunities to invest in today’s market, with 11 sites added to the land holdings in the period. Two of these sites are in Birmingham, where we are delighted to be part of the renaissance of this great city, based on a progressive and refreshing partnership with the local authority. In addition we have made good progress over this and recent periods in bringing the next wave of regeneration sites through the complex path to commencement.  This additional investment in land and construction underpins our objective to maintain annual shareholder returns at the current level of £280m through to 2025.”

Consumers happier with homes by SME builders – FMB

According to new research by the Federation of Master Builders (FMB), buyers are twice as likely to be “very satisfied” with the quality of a new home built by a small and medium-sized (SME) house builder.

The federation’s research into satisfaction rates for people who have bought a home in the past 5 years concluded that 36% were ‘very satisfied’ with the quality of their new build home when purchased from an SME house builder, which is twice as many people whose home was built by one of the top 20 large builders (17%).

Chief Executive of the FMB, Brian Berry, said:

“There is a popular misconception that new build homes are poor quality compared to period properties that were built to last. Small local house builders, who hang their hat on delivering high-quality new build homes, find this view immensely frustrating. Our research shows that you are twice as likely to be ‘very satisfied’ with the quality of your new home if it was built by an SME house builder as opposed to one of the large top 20 firms. This research draws a clear distinction between what is being delivered by SMEs and what is being delivered by larger firms.”

“For a small, local builder, reputation is everything. They will typically reside in the same community that they’re building in and are therefore doubly motivated to deliver a high quality product that the home buyer will love. Furthermore, SME building firms are more likely to work with a small team of broadly skilled tradespeople. For example, if an SME house builder only employs three bricklayers, they all need to have a wide range of skills and experience. Large house builders tend to use gangs of semi-skilled bricklayers who can lay row upon row of bricks in a line but only a handful of broadly skilled brickies who can turn corners, build chimneys and arches.”

“If we are to improve the image of the house building sector, all house builders, large and small, need to put quality at the heart of every project. Not only will this make our industry more attractive to new entrants, including children and young people, it will soften planning committees to the prospect of new developments. We are in the midst of a serious housing crisis and in order to win people over and make them more pro-development, we need to deliver fantastic new homes that local people would be proud to have built in their community.”