Clark replaced by Clarke as Secretary of State
Simon Clarke has been appointed as Secretary of State for Levelling Up, Housing and Communities as part of Liz Truss’ first cabinet reshuffle as Prime Minister.
Clarke – who replaced Greg Clark in the role – represents Middlesbrough South and East Cleveland, and was widely tipped for the role before the official announcement.
The sixth Secretary of State since housing was added to the department’s title in 2018, Clarke inherits a wide range of challenges: from the Rental Reform Bill, to unlocking new housing supply to meet current targets of 300,000 new homes a year by 2025.
However, Clarke’s first few days will not have been easy, with the resignation of Eddie Hughes – the minister behind the Rental Reform Bill – closely followed by Housing Minister Marcus Jones leaving his position.
Meanwhile, the Department of Levelling Up, Housing and Communities has been told to “get a grip” by the chair of the Public Accounts Committee after the National Audit Office (NAO) revealed that the department is forecast to fall short of affordable homes targets.
In a report examining the two most recent affordable homes programmes, the NAO found that:
- The Government is forecasting 157,000 new homes under the current 2021-26 programme – 23,000 below target;
- The Government also expects 241,000 homes to be built under the 2016-21 programme, falling below its target of 250,000 new homes.
DLUHC needs to get a grip by delivering on the targets it set itself and better directing support to those who need it the most.
DAME MEG HILLIER, CHAIR, PUBLIC ACCOUNTS COMMITTEE
As it stands, the chances of millions of ordinary people accessing affordable housing is depressingly unattainable.
It has also been revealed that development carried out by housing associations has fallen a third below forecast in the quarter to June 2022.
Housing associations registered with the Regulator of Social Housing (RSH) spent £2.9bn on development between April and June, which was 14% below the £3.3bn they had told the RSH they were contractually committed to invest, and 33% below the total forecast expenditure.
Vistry beats expectations as they bid to buy Countryside
Housebuilder Vistry have announced a rise of 14% in pre-tax profits to £190m in the first six months of the year, with completions up 5% to 5,409.
Publishing their half-year results, the developer also revealed that they expect to deliver significant improvement in year-on-year profitability, despite experiencing cost inflation of up to 8%.
The news comes after Chief Executive Greg Fitzgerald revealed a bid to buy rival partnerships developer Countryside for a cash and share offer of over £1.2bn.
It said the deal would create “significant benefits and value creation from the increased scale of the combined business and synergies of at least £50 million”, and a business which would be expected to receive over £3bn per annum in revenue.
Fitzgerald also pledged to retain the Countryside brand if the merger went ahead, and described the deal as “terrific”.
This combination is going to be absolutely terrific. It’s going to absolutely fly. It’s going to be just like the Galliford Try one. It’s going to be great because of the great people we’ve got.
GREG FITZGERALD, CHIEF EXECUTIVE, VISTRY
Meanwhile, Britain’s biggest housebuilder Barratt has delivered record pre-tax profits, exceeding £1bn.
However, after accounting for £408m in legacy repair costs and the Building Safety Pledge, the developer reported statutory pre-tax profits of £642m in the year to 30 June 2022, down from £812m previously.
The firm also stated that it had extended private medical insurance cover to all employees, as well as offering all staff below the senior management team a temporary £1,000 cost of living supplement to the end of 2022.
This has been a year of fantastic progress, with completions recovering to pre-pandemic levels and excellent productivity across our sites.
DAVID THOMAS, CHIEF EXECUTIVE, BARRATT DEVELOPMENTS
Our financial strength and operational excellence position us well to navigate the macro-economic uncertainties ahead.
London-based Berkeley Group also published strong results this week, revealing that they are on course to hit pre-tax profit targets of £600m by April 2023.
In a brief trading update, the housebuilder said strong demand was driving a likely increase of 8.7% on the £552m pre-tax profit it made the previous financial year.
Halifax reveals further slowdown in house price growth
Halifax published their house price index for August this week, revealing that – despite a 0.4% increase in property values in the month – the annual rate of growth eased to 11.5% from 11.8%.
Wales continues to show the strongest annual growth, boasting an increase of 16.1%, as the average UK house price reached a record £294,260.
Meanwhile, UK construction activity fell for the second successive month in August, according to the latest Purchasing Managers’ Index by CIPS / S&P Global.
Recording an index reading of 49.2 in August – higher than 48.9 recorded in July but still below the 50.0 no-change mark, indicating a reduction in activity over the month – the survey found that the housing sector was the only part of construction not to see a drop in activity.
The news comes as British Steel revealed the second big price increase in three weeks, blaming energy prices.
The producer increased structural section prices by £100 a tonne in August, and has now imposed a further £150 a tonne hike with immediate effect.
This comes after a relatively quiet summer, with the last increase of £250 a tonne recorded in March 2022.
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