This week developers eagerly awaited delivery of housing promises to boost their bottom line. So, days after Labour had moved in, Rachel Reeves and Angela Raynor set up their marketing suite, enabling developers to lay out their plans for the future. Welcome to another UK Property News Recap – 12.07.2024
Rachel Reeves Sets up Stall
To kick start the working week, Rachel Reeves announced that a draft National Planning Policy Framework would be published before parliament rises for recess in August.
To whet developers and buyers’ appetite, she let slip some of the policy changes they intend to implement.
– End of the de facto ban on new onshore wind turbines
– Reinstate housing targets
– Focus on brownfield and grey belt sites for future development
Angela Rayner ‘levels’ with the public
Meanwhile, Angela Rayner called time on the DLUHC saying; “A government of public service means fixing the fundamentals to deliver for the British people.
No more gimmicks and slogans, but the hard yards of governing in the national interest.
The department I lead will be the Ministry of Housing, Communities and Local Government.”
Developers plan their next move
Bellway and Avant Circle Crest Nicholson
First Bellway sidles up to Crest Nicholson hoping to tempt them with a lowball offer that was promptly rejected. Then developer Avant gave it a go only to be told no offer from any other party would be considered till Bellway had a chance to sharpen their pencil – deadline July 11th.
In response Bellway sharpened; valuing Crest at more than £700 million, £50 million more than their previous offer. In response, Crest’s share price rose by as much as 5.5% in the first 30 minutes following the news.
Crest is holding its cards close but has till the beginning of August to either stick, twist or fold.
Barratt builds less
Over at Barratt, government promises weren’t enough to motivate the developer to build more…well not yet, anyway. Instead, they declared their intention to build fewer homes in the year to June 2025 (13,000-13,500) compared with the 14,004 built in the year to June ‘24 and 17,206 in 2023.
Vistry looks to build the affordable
Housebuilder Vistry, however, was excited by the prospect of cheaper land values under a Labour government; declaring their intention to build around 18,000 affordable homes a year, to boost their profit margins.
Planning Performance Agreements soar
Over at Bloomberg, the team revealed that more developers were paying additional sums to local authorities to get to the head of the planning queue with planning performance agreements. The problem they encountered was that even when paying for Flexi Plus, check-in staff are reduced, further delaying applications which, in turn, holds up smaller developers.
20 councils ask for “more”
A cross-party group, consisting of 20 councils, went begging at Rachel Reeves’ door asking for more money to keep the housing lights on. Their shopping list included but wasn’t limited too:
- Reforming the Right to Buy scheme
- Extra grant funding
- Government support to borrow more to build their own social housing
The only snag… the absence of cheap money.
Winkworth claims PCL house prices fell 10% in PCL
As a result of Labour’s Non-Dom and private school tax raid, sellers are paring back their outgoings to afford the kids’ fees and additional tax burden just when buyers are looking elsewhere for better overall value. This, according to Winkworth, has resulted in supply increasing just when demand is waning, pulling down the average house price on some of London’s prime addresses by 10%.
Construction growth in May is put down to the weather
A warmer May gave construction output a 1.9% growth spurt on April’s dreich fall of 1.1%. Eight out of nine construction sectors saw growth, led by a 2.8% increase in new housing work. However, output over the past 3 months to May 2024 is estimated to have fallen 0.7%. New work dragging output down by 10.3%.
Huw Pill lets rip, dashing borrowers’ hopes
Huw Pill crushed borrowers’ hopes after suggesting that while services and wage growth remained resilient “he was not yet ready to change his vote in favour of a rate cut”, leaving many financially stretched for longer.
And that concludes another UK Property News Recap – 12.07.2024 Should you have any questions or comments, please get in touch here.
