Barratt: UK will struggle to build 200k homes
Speaking at myhomemove’s annual conference in Burton-on-Trent this morning Adrian MacDiarmid, head of mortgage lender relations at Barratt, said there remained too many constraints on builders for this to be a plausible target.
This year Barratt is on track to build just over 16,000 new units, putting it in first place as the largest builder in the country. The second largest, Persimmon, should build around 14,000.
MacDiarmid said: “Looking at these numbers alone it’s a struggle to see how those figures for the whole of the market will get us even close to the 200,000 mark.”
He added that foremost among several constraints holding the new build market back was the lack of available land to build on.
And he called on the government to make more publicly owned land available faster as well as to admit that it was necessary to start building on green belt land.
Smaller builders are also finding it hard to secure land to build on given bank requirements that 25% of a plot be sold “before the spade goes in the ground”.
MacDiarmid added: “This is definitely holding the market back. Barratt is lucky in that we have a big balance sheet and can deal with this but the smaller builders can’t.
“You have to remember that it takes a year to get planning as well so you’re making a huge up front investment in land on the promise that you will be able to sell homes over a year down the line.
“The housing market is cyclical and while we are in a good environment at the moment, it’s not certain that that will always be the case.”
Stephen Hayter, retail sales director at myhomemove, said: “The last time we saw 200,000 homes build in this country was in 1968/9. To have politicians say they have that aspiration every year, year in year out, is pretty unbelievable.”