Thursday, December 31, 2015

Houses - profits before needs

Britain’s biggest housebuilders possess enough land to create more than 600,000 new homes, the Guardian has found.

The nine housebuilders hold 615,152 housing plots in their landbank, according to financial disclosures. This is four times the total number of homes built in Britain in the past year. Berkeley, Barratt, Persimmon and Taylor Wimpey – the four biggest companies in the industry – account for more than 450,000 of the plots. They are also sitting on £947 million of cash and declared or issued more than £1.5 billion in payouts to shareholders in 2015. Ttheir profits and share prices are booming as they enjoy the benefits of snapping up land cheaply and as the average selling price of their property rises. The housebuilders also include Bellway, Bovis, Crest Nicholson, Galliford Try and Redrow.

The land held by housebuilders includes sites they own and sites that they have an contractual option to build on. Some housebuilders do not publicly disclose all the land they control, meaning their total landbank could be even bigger. For example, Bellway does not report land that has not got planning permission for house construction, while Persimmon says it controls 18,000 acres of “strategic land” on top of more than 90,000 plots that already have planning permission.

Shelter’s Toby Lloyd, head of policy for the housing charity, said: “Developers do need a pipeline of future sites – but when housebuilding is still stubbornly low and landbanks are this large it is a signal of how dysfunctional our housebuilding system is. These are private companies so it’s reasonable for them to seek profits. But when their profits are so high we should be questioning why the government is directing subsidies towards developers to build barely affordable starter homes and away from providing the genuinely affordable housing we so desperately need."

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