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18 industry news


Homebuilders continue to announce positive results POSITIVE RESULTS


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oth Crest Nicholson and the Berkeley Group have recently reported positive results and plans for the future.


Crest Nicholson’s pre-tax profit jumped 52 per


cent to £58.3 million during its half year against the comparable period in 2014. Its open market completions climbed 8 per


cent, with housing revenue up 29 per cent, which Crest believes reflects volume growth as well as sales price and location mix impacts on the aver- age open market selling price. The open market average selling price (ASP) of its homes rose 15 per cent to £309,000, compared to 2014. During the half-year period, sales rates


improved 12 per cent against 2014, averaging 0.93 per outlet per week. Buyer demand continued to be ‘very strong’ with the homebuilder remaining focused on maximising the productive capacity of its operational sites. Forward sales as of mid-June 2015 were £436.4


million, 26 per cent ahead of 2014. Crest said that its revised volume figure:


“Reflects the refocusing of our London division into areas of greater affordability together with quantifying the anticipated level of delivery of units to the institutional private rental sector”. Crest Nicholson CEO, Stephen Stone, said: “Improving economic circumstances and a clear


RECRUITS NEEDED


One million recruits needed to beat housing crisis


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ccording to a white paper produced by EC Harris, construction companies will need to recruit one million new recruits


by 2020 if the industry is to build the homes the country needs. The paper, ‘People and money – fundamental


to unlocking the housing crisis’, examines the lim- its to housebuilding capacity, with consultancy firm EC Harris exploring the ‘inadequacy’ of cur- rent financing and the business models that both the private and public sector use to fund more housing. The report also finds that many more people must be recruited, with the need for a change in accepted construction practices so that


respond online at www.hbdonline.co.uk


the industry can deliver more homes ‘with limited labour resources’. According to EC Harris, the industry employs


1.5 full time workers per home each year, with 120,000 more needed to achieve production of 230,000 units per annum. However, due to growth elsewhere in the industry and high levels of retire- ment, the number of new workers the construction sector will need by 2020 is one million. The paper suggests that in determining a


solution to the UK housing crisis, access to labour and money were more important than planning and land availability. However, with the industry attracting only


around 20,000 trainees each year and unemploy- ment at lower levels than in 2007/8, EC Harris warns that homebuilders would either have to find new routes to skills sourcing or reduce their labour requirements by re-designing the product. The white paper reveals that the key trades in


demand are still bricklayers, plasterers, scaffolders and roofers, with architects and quantity survey- ors also being squeezed in the professional field. The paper also stresses that pressure on availability in these areas ‘will grow significantly’, possibly resulting in ‘market failure – where too many firms chase too few resources’. Head of development at EC Harris, Mark Farmer, explained: “Across the UK, approximately


300,000 units need to be constructed each year in order to meet demand - 50,000 of these are poten- tially needed in London alone. However, in 2014 we delivered less than half of this. “This is now about the need for fresh, radical


thinking from both industry and government, which respects the existing housebuilding model but also seeks out viable routes to large-scale, additional delivery.”


outcome in the general election provide a good operating backdrop for the sector and give us con- fidence to increase our volume target. The business is well positioned to continue on its growth trajectory, delivering high quality homes for our customers whilst generating strong returns for shareholders.” Crest now plans to deliver ‘towards’ 4,000


homes by 2019, higher than its previously stated target of close to 3,500 homes. The Berkeley Group also enjoyed a strong


financial year, with pre-tax profits rising 42 per cent to £539.7 million during the year ending April 30 2015 against 2014. The company said that the housing market had


returned to normal levels following the surges seen in 2013/14 and: “Domestic demand has been strong in our core markets of London and the south of England, whilst London has contin- ued to benefit from a stable social and political environment.” Berkeley sold 3,355 new homes during its


financial year, down on the 3,742 of 2014, but its average selling price rose from £423,000 last year to £575,000. The increase in ASP reflected first completions at schemes including Fulham Reach and One Tower Bridge, which are London schemes that Berkeley acquired in 2009/10.


The firm said that it had launched a number of


new schemes this year, including London Dock in Wapping and 250 City Road, Islington and confirmed that all of these new developments were marketed to the UK buyers first. Berkeley’s chairman, Tony Pidgley welcomed


the outcome of the general election but warned that political uncertainty still remained. He said that Berkeley supported the UK remaining in the European Union: “As this is the best way for London to remain a world city. There is no doubt, however, that for business to thrive, we must not be bound by over-regulation, be this from our own government or Europe”.


Stephen Stone


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