• Issue 36

  • May 2018

The Source

Housebuilder News

Trading at TW Remains High despite Terrible Weather

Although the wintry weather in March had a noticeable effect on the firm’s sales and build rates, Taylor Wimpey has reported that trading throughout the spring selling season has been good, with strong customer demand.

TW’s total order book value stood at approximately £2,155 million for the year to date (2017: £2,210 million), whilst average private sales were 0.85 per outlet per week (2017: 0.93). This represents 9,050 homes (2017: 9,219 homes), excluding legal completions to date and cancellation rates “remained low” at 13%.

At the end of March 2018, TW’s short term landbank stood at around 77,000 plots and the strategic land pipeline stood at around 118,000 potential plots. The company stated that the short term land market remains stable with opportunities to acquire land at investment operating profit margins similar to those achieved in recent years.

TW have confirmed that they are on track to meet annual targets and that activity has recovered despite the weather setback, but expects completions for 2018 to be more second half weighted than 2017.

Pete Redfern, CEO, said: “We have continued to see good demand for new housing through early 2018. Looking ahead, as we embark on the next stage of our strategy, our focus is on building our capability to deliver great quality homes and places for our customers over the long term.”

Persimmon Sales Strong and Looking Off-Site for Further Growth

Since the start of the year, Persimmon has seen robust trading, with visitor levels to site, sales conversion rates and cancellation rates all in line with the company’s expectations.

Enquiry levels are 13% ahead of the prior year with total forward sales revenue around 8% higher than last year; £2.76 billion compared to £2.56 billion in 2017. Persimmon’s weekly private sales rate per site since the beginning of the year is about 0.85 (2017: 0.83) and 9,048 new homes have been sold in the private market (2017: 8,928), with an average selling price of circa £236,500 (2017: c. £229,500).

The group is currently developing 375 active sales outlets across the UK, has opened 65 of the 100 new sites planned for the first half of the year, and says they are building new homes on all their sites that have an implementable detailed planning consent.

In addition, Persimmon highlighted the development of their off-site manufacturing capability in playing an increasingly important role in supporting growth of new home construction volumes. With a manufacturing hub at Harworth, Doncaster, the company is heavily investing in new manufacturing to help improve the supply of construction materials; a new brick manufacturing factory was opened in 2017, with a new roof tile manufacturing facility expected during 2018.

Design Conference – Technology is Principal Tool in Housebuilding

The government has appealed to the housebuilding industry, at the MHCLG Design Quality Conference, to welcome latest innovations “to make sure we are building the good quality homes that our country needs”.

Ministers declared that as part of the government’s goal to deliver 300,000 new homes in England by the mid-2020s, it was “essential” that the quality and design of new housing was tackled. They emphasized that good quality design could lead to community support for new housing and go towards ensuring “we have good quality homes that people can feel proud living in and next door to”.

The conference also highlighted the use of Virtual Reality (VR) technology as a way of winning over communities before development has begun: “By visualising proposed new housing from the neighbour or homebuyer’s perspective, communities will be able to see how development can visually contribute to the area from an early stage, even before planning permission has been granted.”

It also urged councils to learn from other countries, such as Norway, where good design is an integral part of the decision making process. Specifying innovative approaches, in particular the Australian model, it said local planning authorities should establish their own design quality standards, “giving communities the ability to better reflect their own unique character in local planning policy”.

Ministers also examined how developers can utilise better quality design to entice first time buyers “who expect the highest quality homes before parting with their hard-earned deposits”.

Sajid Javid, then Housing secretary, said: “Our homes, for all of us, are the making of us. That is why [this] event is so important. The challenge, now, is to deliver this consistently right across the country, so that high quality design is the norm rather than the exception.”

The conference also included speakers from the Royal Institute of British Architects, The Princes Foundation, and Homes England.