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Housebuilding Market - UK 2010-2014
AMA Research, December 2010, Pages: 91
This the Ninth Edition of the report “Housebuilding Market – UK 2010”.
Key areas in the report:
- Review of Housebuilders – analysis of major housebuilders, volumes, market shares, positioning, key housebuilding indicators, recent corporate
- activity, changes in 2010, and forecasts of future trends.
- Detailed Assessment of the Housebuilding Market – housing starts & completions, forecast completions up to 2014, analysis by sector (private/public), mix of houses/apartments, house prices, house-moving market, urban regeneration, forecasts of future trends.
- New Government – impact on housebuilding – Planning, Regional Spatial Strategy plans, Affordable Housing, impact of Comprehensive Spending Review etc
- Future Prospects – outlook for 2011-12. Medium term prospects, barriers to growth.
- Following rapid decline in 2008 / early 2009, housebuilding volumes have recovered to some extent from mid 2009-mid 2010. However, late-2010 has seen a slowdown in the market with prospects in 2011 more uncertain, and this report reviews current market developments and provides a balanced overview of activity levels, highlighting variations in sector and regional performance.
Areas of particular interest:
- Focus on major changes in housebuilding – forecasts up to 2014.
- Trends and prospects for affordable housing.
- Recent decline in apartments- will it continue?
- Activity levels in late 2010 – prospects for recovery – timing and scale of upturn – starts, completions, unsold stock.
- Impact of Coalition Government – CSR, Affordable Housing Programme and Code for Sustainable Homes, growth of MMC and OSM etc.
A & J Stephen (Holdings) Ltd, Abbey New Homes, AWG Property, Balfour Beatty, Barratt Developments Plc, Bellway Plc, Berkeley Group Plc, Bewley Homes Plc, Bloor Homes, Bovis Homes Group Plc, Britannia Developments, Canary Wharf Group, Connolly Homes plc, Countryside Properties Plc, Crest Nicholson Plc, Crosby Lend Lease, Croudace Group, Durkan Ltd, Elan Homes, Fairview New Homes, Galliford Try Plc, Hopkins Homes, Inspace Partnerships (Willmott Dixon), Keepmoat Group, Kendrick Homes, Kier Group, Land Securities, Lang O’Rourke, MacTaggart & Mickel, Mansell Partnership Housing, McInerney Group, Miller Group Ltd, MJ Gleeson, Morgan Sindall, Oakdene Homes Plc, Persimmon Plc, Quintain, Redrow Group, Scotia Homes, Shepherd Homes, Strata Homes, Taylor Wimpey Plc, Telford Homes, Tulloch Homes, Wain Homes, Weston Homes Plc.
Key areas covered in the report include:
- Overall market size, number of builders, analysis of key changes in recent years.
- Analysis of market shares of leading housebuilders, comparisons of changing shares in 2009/10.
- Major review of leading national housebuilders – analysis of key indicators for UK housebuilding (completions, turnover, pre-tax profits and average selling price), recent trends, current market position.
- Rationalisation of industry structure, mergers & acquisitions, review of leading commercial developers in housebuilding, impact of new entrants, future prospects etc.
- Review of the leading regional and local housebuilders, recent corporate activity. Analysis covering turnover, pre-tax profit, completions etc.
- Overview of construction sector, output levels by sector and impact on housebuilding, future trends.
- Current market conditions, overview of housebuilding during 2009/10 – recovery up to mid-2010, performance in late-2010 and prospects into 2011.
- Analysis by sector – Private, public, self build – volumes, changing market mix, factors influencing the market, future trends, value of housebuilding output by sector.
- New housing starts and completions –trends since 2004, review of market volatility in recent years, forecasts up to 2014.
- Analysis of completions for public/ private sectors by region, impact of affordable housing market.
- Mix of flats and traditional housing – rapid growth in volumes of flats now reversed, share changes 2000-2010, future prospects (market saturation?).
- Market structure – stock of buildings in UK, ownership structure, housing stock by age of dwelling, average property prices, residential property transactions, land banks, increasing influence of mixed-use developments on “brown-field” sites.
- Factors influencing the housing market - the Sustainable Communities Plan and the Affordable Housing Programme, review of planning system, household projections, net immigration, etc.
- Overview of factors influencing use of MMC - Product review of OSM / MMC -, timber, steel frames, concrete - market volumes, mix (private / affordable) and trends etc.
FORECASTS - SHORTER & LONGER TERM PROSPECTS
- Forecasts of completions 2010-2014 – market volatility, short term prospects for 2010/11 – length and severity of downturn? Long term prospects for sector – rate of market recovery from downturn.
- New Coalition Government - impact of Comprehensive Spending Review, affordable housing programme/budgets, Planning, Regional Spatial Strategy plans, Eco Towns etc.
- Net Additional Housing – review of housing targets in England, review of confusion over new housebuilding and net additional housing (including conversions and change of use ) – comparison of forecasts against targets – scale of shortfall?
- Factors influencing timing and scale of recovery – completions, unsold stock, starts.
2. SUMMARY & FUTURE PROSPECTS
3. ECONOMIC ENVIRONMENT
3.2 INFLATION & INTEREST RATES
3.4 HOUSEHOLD CONSUMPTION
3.5 HOUSING & CONSTRUCTION
3.7 POPULATION PROFILE
4. THE HOUSING MARKET
4.2 HOUSEBUILDING TARGETS AND PERFORMANCE
4.2.1 Net Additional Dwellings
4.2.2 Housebuilding Forecasts
4.3 REGIONAL HOUSEBUILDING – PRIVATE SECTOR
4.4 REGIONAL HOUSEBUILDING - PUBLIC SECTOR
4.5.1 Mix of Housebuilding Starts and Completions
4.5.2 Overview of Flats Market in UK
5. KEY INFLUENCING FACTORS
5.1 RECENT GOVERNMENT POLICY CHANGES
5.2 CODE FOR SUSTAINABLE HOMES (CSH)
5.2.1 Code Assessments
5.2.4 Current CSH Developments
5.2.5 Costs to become Sustainable – Masonry v Timber Frame
5.3 ENERGY EFFICIENCY (SAP)
5.4 ECO TOWNS
5.5 AVERAGE PRICE OF NEW DWELLINGS
5.5.1 Regional Variations
5.6 RESIDENTIAL PROPERTY TRANSACTIONS
5.7 MORTGAGE LENDING
5.8 HOUSING STOCK
6. THE HOUSEBUILDERS
6.1 OVERALL MARKET
6.3 HOUSEBUILDERS MARKET SHARE
6.4 NATIONAL HOUSEBUILDERS
6.4.1 Company Profiles
6.5 CONSTRUCTION GROUPS AND HOUSEBUILDERS
6.5.2 Company Profiles
6.7 REGIONAL & LOCAL HOUSEBUILDERS
6.7.1 Company Profiles
7. CONSTRUCTION ISSUES
7.1 MODERN METHODS OF CONSTRUCTION
7.2 TYPES OF MMC
7.3 OSM SUPPLIERS
7.4 THE FUTURE OF MMC
CHART 1: UK HOUSEBUILDING STARTS AND COMPLETIONS FORECAST 1998 - 2015 10
CHART 2: INTEREST RATES AND INFLATION (CPI) FROM 1992-2014 13
CHART 3: PDI & SAVINGS RATIO AT CURRENT PRICES 1992-2014 15
TABLE 4: EXCHANGE RATE FLUCTUATIONS 2004-2010 - STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 17
CHART 5: AGE DISTRIBUTION OF THE RESIDENT UK POPULATION MID-2008 (‘000) 18
CHART 6: HOUSING PERFORMANCE – COMPLETIONS, NET ADDITIONAL DWELLINGS AND TARGETS -ENGLAND 2006-10 23
TABLE 7: COMPONENTS OF NET HOUSING SUPPLY IN ENGLAND 2006/07 TO 2009/10 24
CHART 8: NET ADDITIONAL DWELLINGS TARGETS AND FORECASTS, ENGLAND 2000 - 2015 26
CHART 9: UK HOUSEBUILDING STARTS AND COMPLETIONS FORECAST 1998 - 2015 28
TABLE 10: UK HOUSING STARTS 2000-2009 BY SECTOR (‘000) 30
TABLE 11: HOUSE BUILDING COMPLETIONS 1998-2009 – UNITED KINGDOM (‘000 DWELLINGS) 32
CHART 12: STARTS, COMPLETIONS AND SALES OF PRIVATE NEW HOUSING - ENGLAND AND WALES - 2006-2009 33
TABLE 13: PRIVATE HOUSE BUILDING STARTS 2005-2009 ENGLISH REGIONS BY VOLUME 35
TABLE 14: PRIVATE HOUSE BUILDING COMPLETIONS 2005-2009 ENGLISH REGIONS BY VOLUME 36
TABLE 15: REGIONAL RESIDENTIAL HOUSING SALES, PRIVATE SECTOR 2006-2009 37
CHART 16: PRIVATE SECTOR - STARTS, COMPLETIONS AND SALES – 2009 38
TABLE 17: PUBLIC SECTOR- HOUSE BUILDING STARTS 2004-2009 ENGLISH REGIONS BY VOLUME 39
TABLE 18: PUBLIC SECTOR- HOUSE BUILDING COMPLETIONS 2004-2009 ENGLISH REGIONS BY VOLUME 40
CHART 19: HOUSING TYPES - STARTS AND COMPLETIONS - ENGLAND 2006-2009 41
CHART 20: HOUSEBUILDING COMPLETIONS - % MIX BY HOUSES / FLATS ENGLAND 2001-2009 43
TABLE 21: ESTIMATED NUMBER OF FLATS BUILT IN UK – 2003-09 (‘000S) 44
CHART 22: CODE FOR SUSTAINABLE HOMES – CATEGORIES NECESSARY TO ACHIEVE CODE POINTS 47
CHART 23: CODE FOR SUSTAINABLE HOMES – CODE 3-6 LEVEL CERTIFICATES ISSUED AT DESIGN AND CONSTRUCTION STAGE 2009/10 48
TABLE 24: TIMESCALES FOR INTRODUCTION OF CODE LEVELS - ENGLAND 49
TABLE 25: AREAS OF IMPACT ON CODE LEVELS – ENERGY, MATERIALS, WASTE ETC 51
CHART 26: AVERAGE PRICE OF NEW DWELLINGS UK 1997 – 2009 (£000) 55
CHART 27: UK HOUSE PRICE TRENDS - 2005 – 2010 BY COUNTRY 56
TABLE 28: AVERAGE PRICE OF NEW DWELLINGS 2004-2009 BY UK REGIONS (£) 57
CHART 29: NUMBER OF QUARTERLY RESIDENTIAL PROPERTY TRANSACTIONS – UK 2006-2010 (‘OOOS) 58
TABLE 30: AVERAGE PRICES, LENDING AND INCOME - NEW DWELLINGS UK 1997-2009 (£’000) 59
TABLE 31: STOCK OF DWELLINGS (‘000) IN THE UK 1971-2009 60
TABLE 32: NHBC REGISTERED BUILDERS BY NUMBER OF UNITS STARTED 2004-2009 62
TABLE 33: LEADING COMPANY MARKET SHARES IN HOUSEBUILDING COMPLETIONS GT. BRITAIN - 2009 65
CHART 34: TOP 3 COMPANIES SHARE OF PRIVATE HOUSEBUILDING MARKET 1997-2009 (%) 66
TABLE 35: KEY INDICATORS FOR UK HOUSEBUILDING BARRATT DEVELOPMENTS PLC. 2007 - 2010 67
TABLE 36: KEY INDICATORS FOR UK HOUSEBUILDING TAYLOR WIMPEY PLC. 2007-09 68
TABLE 37: KEY INDICATORS FOR UK HOUSEBUILDING PERSIMMON PLC. 2007-09 69
TABLE 38: KEY INDICATORS UK HOUSEBUILDING BELLWAY PLC 2007-2010 70
TABLE 39: KEY INDICTORS UK HOUSEBUILDING BERKELEY GROUP PLC 2007 -2010) 72
TABLE 40: KEY INDICATORS UK HOUSEBUILDING - REDROW GROUP (TURNOVER, PROFIT AND UNIT COMPLETIONS 2007-2010) 72
TABLE 41: KEY INDICATORS UK HOUSEBUILDING - MILLER HOMES 2007-2009 73
TABLE 42: KEY INDICATORS UK HOUSEBUILDING CREST NICHOLSON PLC 2007-2010 74
TABLE 43: KEY INDICATORS UK HOUSEBUILDING - BOVIS HOMES GROUP PLC 2007/09 75
CHART 44: UK HOUSEBUILDING MARKET – MIX BY SECTOR AND BUILD METHOD (MMC/TRADITIONAL) – 2009 BY VOLUME 88
Prior to the change of Government in May 2010, the previous government identified a target of 240,000 new homes a year with a view to achieving 2m new homes by 2016 and a further 1m by 2020. The top down targets set by the previous government through the regional spatial strategy plans were abolished by the new Coalition government in June 2010 with the intention to give decision-making powers on housing and planning to local councils.
The current government, by introducing the New Homes Bonus, intends to incentivise local planning authorities to increase house building and be responsible for establishing the right level of local housing provision in their area. Whether councils will retain their existing targets, or review them, will no doubt be known before the end of 2010 since the government are anxious that communities are made aware of new targets as soon as possible – though some authorities have already announced the reduction of some commitments.
Central government will match the additional council tax raised by each council for each new house built for each of the six years after that house is built. It is hoped that these measures will encourage local communities to build new housing, knowing they will receive money to pay for increased services or prevent council tax increases.
Highlighted below are the main updates following the abolition of the regional spatial strategies:
- Planning Policy Statements (PPSs) which provide planning policies on a wide range of topics including Green Belts, Sustainable Economic Growth, Housing and Climate Change will remain in force
- Local planning authorities will continue to develop Local Development Frameworks
- Local authorities will continue to identify enough viable land to meet housing growth and have a 5 year land supply of deliverable sites
- The government is committed to the protection of the Green Belt and the revocation of Regional Strategies will prevent top-down pressure to reduce the Green Belt protection.
- The national indicative minimum density of 30 homes per hectare has been removed
- Although the designation of gardens as ‘previously developed’ land has now been removed this does not mean that there is a ban on building in gardens.
It is difficult to envisage at this stage how the changes highlighted above will affect housing volumes. We estimate that, in 2010, the number of housing starts for residential housing in the UK will be around 130,000 which is an increase over depressed 2008/09 levels but still well down on recent historical levels. However, for forecasting purposes in the current economic climate it is the number of housing starts in the short / medium term which will be an important barometer as to the buoyancy of the housing market.
- A & J Stephen (Holdings) Ltd
- Abbey New Homes
- AWG Property
- Balfour Beatty
- Barratt Developments Plc
- Bellway Plc
- Berkeley Group Plc
- Bewley Homes Plc
- Bloor Homes
- Bovis Homes Group Plc
- Britannia Developments
- Canary Wharf Group
- Connolly Homes plc
- Countryside Properties Plc
- Crest Nicholson Plc
- Crosby Lend Lease
- Croudace Group
- Durkan Ltd
- Elan Homes
- Fairview New Homes
- Galliford Try Plc
- Hopkins Homes
- Inspace Partnerships (Willmott Dixon)
- Keepmoat Group
- Kendrick Homes
- Kier Group
- Land Securities
- Lang O’Rourke
- MacTaggart & Mickel
- Mansell Partnership Housing
- McInerney Group
- Miller Group Ltd
- MJ Gleeson
- Morgan Sindall
- Oakdene Homes Plc
- Persimmon Plc
- Redrow Group
- Scotia Homes
- Shepherd Homes
- Strata Homes
- Taylor Wimpey Plc
- Telford Homes
- Tulloch Homes
- Wain Homes
- Weston Homes Plc