New Housing Agency to Boost Housebuilding

A new national housing agency – Homes England – has been launched by Housing Secretary Sajid Javid as one of the key steps towards delivering the homes the country needs.

housebuilding diagram and model

As the successor to the Homes and Communities Agency, Homes England will drive forward change, as set out in the government’s housing white paper.

By bringing together their existing planning expertise and new land buying powers, the new agency will play a major role in securing land in areas where people want to live, support smaller and more innovative house builders into the market and resource brownfield sites from across the country to deliver homes for families.

Homes England will play a major role in fixing the housing market by helping to deliver an average of 300,000 homes a year by the mid-2020s.

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Lloyds Bank Release 2018 Housebuilding Report

Our third annual survey of the UK housebuilding industry comes at a time when interest in the sector and its ability to deliver new homes has never felt stronger.

man building brick wall

The housing market has long been subject to Government intervention – the focus of which is transitioning from largely demand-led to supply-led policies and solutions. Our research found an industry that is determined to grow and is using innovative new methods to boost the housing supply.

But housebuilders are facing challenges. Firms told us that Brexit has the potential to limit their access to workers from the EU, while a drop in the number of young people from the UK entering the industry is also contributing to concerns about long-term access to skills. Coupled with planning restrictions and the availability of land, we found a sector facing a unique set of challenges.

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Construction growth continues to be fuelled by house building

Stable growth for the construction industry is shown by figures from the Office for National Statistics as output rises 4.1% over the year to Q3 2013.

 

 Buildzone

 Housebuilding continues to be the main source of fuel for much of the growth– private housebuilding rose by 15.6% in the same period. This growth in activity is assisted by the Help to Buy scheme which enables homebuyers to obtain a new home by only putting down a 5% deposit.

Julia Evans, chief executive of the National Federation of Builders, said:

“Help to Buy has given a much needed shot in the arm to the housebuilding sector. Activity is increasing, but we started from a low base. We are still building around 40% fewer homes than we were building in 2008; nowhere near enough to meet demand. We need to ensure that the industry is on a sustainable footing before the three-year Help to Buy scheme ends so we don’t see that level of decline again.”

Output in the repair and maintenance sector fell by 0.6%, but despite this drop has remained fairly steady. In contrast to the Green Deal which is struggling to catch the public’s imagination, The Energy Companies Obligation (ECO) continues to generate a significant amount of retrofit work with almost 50,000 installations in August. Cutting funding for ECO would reduce available work at a time of rising costs and further depress activity in this sector.

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Major housebuilders expected to see double-digit profits in 2012

Housebuilders’ profit margins are expected to return to double digits next year, analysts said last week, providing hopes of improved trading for domestic service suppliers.

Numis Securities analyst Chris Millington said margins are set to climb from 5-10 per cent to 20-25 per cent, figures not seen since the downturn.

Persimmon and Bovis Homes have both stressed a focus on margins in their trading updates to the Stock Exchange for the first six months of 2011.

Mike Farley, chief executive of Persimmon, the biggest housebuilder by volume, anticipates the underlying operating margin for H1 2011 will hit 9 per cent, up from 8 per cent the year before.

Barratt has also reported a return to profit thanks to its London and South-east market, it said last week.

In a trading update for the year ended 30 June, the company said it expects to deliver a profit before tax and exceptional items of £40 million, compared with a loss of £33m in 2010.

Although after the costs of a four-year £1 billion refinancing are taken into account, the company is expected to make a small loss, its chief executive Mark Clare confirmed.

Meanwhile, Bovis chief executive David Ritchie said he is also confident of delivering an operating margin of at least 7 per cent for the same period, compared with 4.2 per cent for 2010.

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Economy needs housebuilding budget boost

Tackling housing crisis would create 200,000 jobs

HBF: Urgent measures to dramatically increase housing supply and address the growing housing crisis must be included in next week’s budget. Providing desperately needed homes would create 200,000 direct jobs over the next year and stimulate growth giving the country a massive economic boost.

A year into office the Government is facing a huge housing dilemma. House building is at an all time low; planning permissions are continuing to decline; the number of first time buyers has collapsed; millions of families are languishing on Local Authority waiting lists; and there is an ongoing hiatus being caused by the Coalition’s radically different planning system that is still being formulated, with Local Authorities struggling to get to grips with the new incentive based proposals.

Housing projectMeanwhile, economic growth is crucial to the wider economy over the next few years. According to Government figures, even in its current crisis state, housing supply accounts for around 3% of UK GDP and provides between 1 and 1.25 million jobs in the UK.

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