House builders ‘taking a breath’
Whilst the debate continues to rage about the need for more housing, the press is reporting that many National house builders are ‘slowing down’. The experience from our Agency teams is that house builders are still interested in new site opportunities but their rates of acquisition have slowed. The house builders are now largely working through their existing land banks, at least for a while.
Barratts recently reported a slowing in sales activity as the market ‘takes a breath’ after what the Financial Times described as last years ‘frenetic pace’.
The British homebuilder is the latest major construction group to warn that the market is settling back into a “more stable” state as the impact of last year’s Help to Buy scheme begins to recede.
The launch of the UK government’s property ownership scheme boosted sales last year, but in recent months house price rises have begun to slow. The introduction of tighter mortgage lending rules through the Mortgage Market Review earlier this year also slowed transactions activity, this is a point that some people in the office have had difficulty with too – filling in mortgage application forms is now difficult enough, let alone getting an approval for a home loan.
Barratts response to a change in market condition was to say they will be targeting older customers as home ownership levels amongst younger people continues to fall.
An interesting piece of feedback from Barratts which relates partly to my colleague David May’s Blog about build costs was that Barratts say the biggest constraint on expansion is labour availability and cost. “Salaries for bricklayers have risen 15% in the past year and are back to 2007 levels” was the quote.
It seems that a combination of factors from satisfactory ‘land in the bank’; higher build costs and a weakening demand mainly on the back of new mortgage regulation means the house builders are happy to ‘take a breath’.
My planning colleagues are no less busy on working new consents and negotiating planning conditions so the market has certainly not stopped!
For advice on selling, acquiring or obtaining planning consent on residential land call one of the team at Harris Lamb.