Author Topic: Channel 4 Dispatches - Housebuilders landbanking profits  (Read 2638 times)

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Channel 4 Dispatches - Housebuilders landbanking profits
« on: November 01, 2016, 06:39:38 am »
On a personal level I have been banging on about housebuilders' landbanking for years.
Their lobbyists, the Home Builders Federation [HBF] counter any accusation regarding landbanking - builders not building new homes on their five year supply of land, by blaming planning delays and other restrictions such as the industry's self inflicted skills shortage.

It will be interesting to see what they say next week on:
Channel 4 Dispatches "Britain's Homebuilding Scandal"
Monday 7th November 2016

"Many are struggling to find a home; a reason why is too few houses are being built. Liam Halligan probes developers deliberately holding back land to maximise profits."

And now the UK government wants first time buyers to buy pre-fabs just so it can hit its target of 1million new homes by 2020!
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Re: Channel 4 Dispatches - Housebuilders landbanking profits
« Reply #1 on: November 08, 2016, 08:41:00 am »
Well that was a somewhat wasted opportunity.
(If you can't afford to buy a home in London, buy one where they are cheaper and commute!)
As expected, the programme was all about big plc housebuilders "Landbanking" - not developing land with planning approval and waiting for house prices to rise and increase the profitability of the development.

Since 2010 there has been a 60% increase in the number of new homes granted planning permission but in the same period the number of new homes actually built has risen by just 12%, according to government official data.

Twenty years ago, 57% of 25 to 34 year-olds owned their own home.
Today just 37% own a home, often only possible with the help from the Bank of Mum and Dad.

Professor Paul Cheshire of the LSE said:
Quote
"There is a shortfall of between 1.6m and 2.3m in the number of new homes built over the last 20 years.
There is no chance we will build 1 million new homes by the end of this parliament”

Clive Betts MP who is on the DCLG committee, said:
Quote
"housebuilders deliberately restrict supply. They want to maximise the price they [housebuilders] can charge for the home and maximise their profits.
Land is being hoarded not developed."
In England alone, around 476,000 new homes have planning permission that remain unbuilt, a record high.

The latest full-year figures for the big three housebuilders show Persimmon's annual profits at £638m, up 34% on the year before. Taylor Wimpey made £604m, also up 34%, while Barratt made £682m, a 45% rise.

What action will Javid take? Fines for housebuilders that fail to build?

Savid Javid told Dispatches:
Quote
"The homebuyers must come first. This is going to be my number one priority. The sharp rise in permissions is great news, but people can’t live in a planning permission. What we need to do is find ways to incentivise developers to use planning permissions."

"There will certainly be action. Carrots and sticks – that’s exactly what I’m looking at. I’m determined we really get a grip on this and do something that will last for the long term and make a difference."

The UK’s house-building industry is a mighty powerful lobby. Can Javid face it down?
Quote
"The people are the most powerful lobby in this country and they’ve made it absolutely clear enough is enough, this is my number one priority."

Andrew Whitaker from the Home Builder Federation (HBF - Planning Director) claimed, against all available evidence to the contrary, that:
Quote
"housebuilding industry is increasing production. There is no reason why it would delay"
"The industry is not sitting on landbanks. There is no reason why we would delay selling houses. It is atrocious that we have not delivered enough houses in this country over many many years and the reasons for that is not the housebuilding industry."

So not guilty then?

When asked about fines for housebuilders who fail to build he said:
Quote
"If you start by restricting the output of the housebuilding industry, it will react by reducing output."
In 2013, just 133,000 new homes were built -  the lowest for over 50 years.
In 2015, 152,000 new homes were built an increase of 12% over two years.
Of these, 44,360 new homes were built by Barratt, Taylor Wimpey and Persimmon across the UK,  but they had planning permission to build 200,823 more and have another 278,600 plots in strategic landbanks.

The Department of Communities and Local Government is due to publish a White Paper later this month to set out proposals to speed up housebuilding and tackle the shortage of new homes being built.

As they say, time will tell, talk is cheap and actions speak louder than words.
These plc housebuilding donkeys have got fat on all the 'carrots' this government has fed them.
Now its time for the 'stick'!
New Home Blog - New Home Expert is committed to providing help and advice for people having issues with their new homes and difficulties with house builders as well as helping potential buyers reduce the risk of possible problems if they do buy.