House builders woes never seem to end.
Initially they were forced to go into hibernation in an effort to conserve cash as demand dropped. Some companies like Persimmon actually suspended all construction work regardless of what stage work was at. This saw the sites turned overnight in to Mary Celeste style abandoned sites with materials, plant and machinery literally left where they were the day before. Gleeson actually closed down their Hampshire HQ and moved the business back to Sheffield to the plant hire depot. Desperate times required desperate measures.
In conversation with house builders its been obvious for a while that they simply don’t know what to do. Demand has plummeted or even completely disappeared in some cases and last month a couple of major regional players were telling me that it’s only a matter of time before they go out of business if mortgages don’t become easier to find soon.
They won’t be cheered by Knight Frank’s latest report, The Future of Residential Development where they have picked up on the non trade buyers that are picking up sites for a song. Perhaps they are looking to sit on them after taking Mark Twain’s advice* or perhaps they are looking at JV’s with construction companies.
Whatever the reason it is a worrying trend that won’t help the chronic lack of new dwellings that are being built in the UK to house the growing population. The government’s own target of 240,000 new homes a year looks like childish optimism when we weren’t even hitting those numbers when times were good. Numbers of completions are around 60,000 pa at the moment. Unless somebody has got their numbers very wrong this crisis is laying in wait.
* “Buy land, they’re not making it any more”