After taking over Beazer, Persimmon boss predicts sector will be swallowed by five 10 000-unit firms.
Persimmon chief executive John White has predicted the emergence of a super-breed of housebuilders after the round of consolidation in the sector has run its course.

White, whose firm's £537m offer for Beazer was agreed this week, said the recent activity in the sector would kick-start a radical shake-up among housebuilders.

The successful bid followed Taylor Woodrow's £535m bid for Bryant, which was agreed last week.

White said: "I think this is only the beginning. This is the start of the rationalisation that people have been talking about." He predicted that at least five housebuilders would emerge in the next two to three years, each building 10 000 units a year. Wimpey and Barratt are currently the only housebuilders with a comparable output.

White said: "Those run by the best management teams will be the ones that come out on top." He said the trend towards super-housebuilders could become more pronounced. "I can see the next stage being that the firms would build 20 000 homes a year between them," he said.

White agreed that the government's PPG3 planning guidance, which restricts greenfield development, was one factor behind consolidation in the sector.

He said: "It's a factor. Some housebuilders have been pushing more volume off fewer sites and selling at lower prices. With margins falling, it's made them exposed to bids." White said the growth of the larger housebuilders would be helped by more prefabrication and the bundling of additional services.

Persimmon, he said, was already looking to offer financial and maintenance packages to customers. "For far too long we have closed the book on customers after we finished building the house. We should be looking at packages that offer major benefits over future years." Persimmon's offer for Beazer, which values Beazer shares at 195p, was recommended to shareholders by Beazer's management on Tuesday.

However, Taywood's offer for Bryant was opposed by fund manager Schroder, which recommended that the company withdrew from the deal and bought back its shares. Schroder is thought to have raised its concern with Taywood management this week.

One analyst, who argued that its concerns were misguided, said: "Taywood is buying future values.

It's like spending good money on taking a girl you like out to dinner rather than spending less on a girl you don't."