Volume builders post booming profits as house price growth continues

Nationwide and Zoopla reveal February house price growth

Nationwide reported 12.6% annual growth in the twelve months to February, with the average property price increasing by 1.7% in the month to £260,230 – the first time that the average cost of a house has exceeded £260,000.

The bank also revealed that the average house price is now 20% higher than in February 2020.

Meanwhile, Zoopla reported that house prices grew by 7.8% in the year to the end of January, whilst the number of properties put up for sale rose by 5%.

The property website revealed that the average UK house price has risen by £80,000 during the past decade, reaching £244,100. However, there are signs that the rate of growth is slowing, with property values rising by just 0.9% over the last three months – the slowest growth since August 2020.

Housebuilders post strong results as construction output grows

This week Pete Redfern, posting his last set of accounts as Taylor Wimpey Chief Executive, reported that revenue grew 54% in the year to December 2021.

“Demand for our homes remains strong and we continued to drive significant margin improvement in 2021, as we optimise selling prices and maintain our strong focus on cost efficiency,” Redfern said.

Meanwhile, Vistry has more than trebled its pre-tax profit and boosted turnover by 30%, driven by a focus on its mixed-tenure partnerships arm.

The housebuilder reported pre-tax profits of £319.5m in the year to December 2021; a 224% increase on the previous calendar year.

Finally, Persimmon unveiled pre-tax profit of £66,000 per house, whilst making margins of 31.4%. The volume developer completed 14,551 homes in 2021, with an average selling price of £237,078.

Construction output also grew at the fastest rate for eight months in February, according to the latest IHS Markit/CIPS results.

The survey of construction companies revealed that output improved to 59.1% in February, with housing output rising from 54.3% in January to 61.5% in February.

Contractors call on Treasury to delay red diesel ban

The National Federation of Builders has called on the Government to delay their proposed removal of the red diesel rebate in April 2022.

Citing Covid, the energy crisis and the war in Ukraine, the trade body urged the Treasury to push the ban back by 12 months, warning that even the smallest shifts in prices could put many businesses in jeopardy.

Richard Beresford, chief executive of the NFB, said: “These are unprecedented times and after rejecting industry pleas on minimal exemptions for plant vehicles that could not be electrified, such as mobile cranes, this policy change arrives in the middle of a perfect storm on British energy costs and so a twelve-month deferral on removing the red diesel rebate is pragmatic.”

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