Housebuilders are in clover at the moment, but there will be pressure to boost output
Results season for the housebuilders kicked off this week, with Taylor Wimpey, Persimmon, Redrow, Barratt and Bovis all announcing good news for the assembled City analysts and investor wonks. With bank lending up and Help to Buy adding stimulus, even McCarthy & Stone is hinting at a future flotation. It’s clear housebuilders are in clover at the moment.
Encouragingly the figures also showed housing output rising alongside profits for the first time – and evidence of more increases to come.
Government figures this week show the level of home ownership has fallen to just 65% – a legacy of six years when securing a mortgage has been all but impossible for first time buyers
Bovis is looking to open more regional businesses, likewise McCarthy & Stone, and even the previously cautious Persimmon is talking about increasing production from 11,500 homes today to anything up to 15,000 in future.
Of course with new homes comes new jobs for the industry - Barratt alone is talking about hiring a further 3,000 staff in 2014, including 1,100 apprentices, graduates and trainees - very welcome news with National Apprenticeship Week around the corner.
But all this should be put in context: government figures this week show the level of home ownership has fallen dramatically to just 65% – down from 71% in 2003 - a legacy of six years when securing a mortgage has been all but impossible for first time buyers.
With just 123,000 homes started in 2013, the housing industry still needs to double production to meet demand.
As the market improves, housebuilders will be under pressure to increase output to meet this need, but the reality is they are not likely to attempt to meet it on their own.
Joey Gardiner, assistant editor