Lack of support for sector leaves many disappointed
Jeremy Hunt delivered his Spring Budget this week; but failed to contain any meaningful new measures to support housing.
Whilst Hunt stated that the Government was “on track” to deliver one million new homes in this parliament, there was scant else to buoy the housebuilding industry; albeit he did announce £124m at Barking Riverside to deliver 7,200 new homes.
The Home Builders Federation bemoaned the lack of support, saying: “The dream of home ownership continues to slip away from younger generations while anti-development planning policies are already seeing fewer new homes built.”
Housebuilder magazine records further reaction, such as Peter Truscott – Chief Executive Officer of Crest Nicholson – describing the Budget as a “missed opportunity” for the Government to give “desperately needed support to boost the housing supply in this country.”
There was no support for SMEs, no sustainability initiatives beyond the reference to nuclear energy, and housebuilding is clearly not a top five priority for this government, which may result in a new political party in No. 10.
Mark White, Managing Director, Bargate Homes
Halifax reports fifth consecutive monthly house price rise
The Halifax published its house price index for February this week, reporting a 0.4% increase in the average UK property value in the month.
Property prices also grew by 1.7% over the year to reach £291,699.
Northern Ireland is the strongest performing nation or region in the UK, with house prices rising by 5% over the year. London continues to have the highest average house price across all regions, at £536,996.
Even with growing wages and inflation falling back, raising a deposit and affording a sizeable mortgage remains challenging, especially for those looking to join the property ladder, so it remains a possibility that there could be a slowdown in the housing market this year.
Kim Kinnaird, Director, Halifax Mortgages
Housebuilding output jumps in February
The latest S&P Global / CIPS UK Construction Purchasing Managers’ Index has seen a stabilisation in construction output, with the headline index up from 48.8 in January to 49.7 in February.
Whilst an increase in value, the figure continues to fall below the 50.0 threshold, which indicates a contraction in output.
However, housebuilding saw the biggest turnaround since January, with its index leaping from 44.2 to 49.8 – its highest level since November 2022.
Merchant sales drop sees manufacturers raise alarm
The latest Builders Merchants Building Index report, produced by MRA Research, has revealed that builders merchants’ value of sales in Q4 2023 were down by -5.7% compared to Q4 2022, with volume sales falling by -12.0% and prices rising 7.1%.
But despite this drop in activity and the announcement of the UK economy entering a technical recession at the end of 2023, and a continuing stream of gloomy world news, consumer confidence is increasing. Falling inflation and food prices, and maybe even the prospect of political change with a general election in view have lifted spirits.
Mike Rigby, Chief Executive Officer, MRA Research
The fall in volume seems to have taken its toll, with building merchant Travis Perkins reporting a -71.4% fall in pre-tax profit in 2023 when compared to the previous year.
According to the firm’s results for the year to 31 December 2023, pre-tax profit was £70m (2022: £245m).
Meanwhile, brick manufacturer Ibstock have revealed a -20% fall in revenue, with £406m of turnover in 2023 contrasting sharply with £513m in 2022, and profit down from £140m last year to £107m.
The firm also reported a -30% reduction in brick volumes sold in 2023 when compared to the previous year.
In other news…
Dame Kate Barker CBE is to lead a new commission into England’s housing shortage, twenty years after her report on housing supply.
Dame Barker commented: “Twenty years on from leading a review of housing supply it’s depressing to find many of the problems identified still remain. A pragmatic rethink is overdue.”
Meanwhile, the Government has extended the deadline for the Future Homes Standard consultation to 27 March, following concerns raised by the Home Builders Federation and its members.
Housing View 