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| Housebuilder Barratt calls for public land sales 'to overcome homes shortage' | Housebuilder Barratt calls for public land sales 'to overcome homes shortage' |
| (about 3 hours later) | |
| The boss of Britain's second biggest housebuilder has said Britain's housing crisis can only be overcome if the public sector releases land for new developments. The Ministry of Defence, local authorities and hundreds of other public bodies own up to 35% of the land ready for development, said Barratt Development's Mark Clare, and only when they agree to sell can a building boom get under way. | |
| The call came as economists at PwC predicted that despite recent signs of an upturn in the housing market, it could take until 2021 for average prices to return to their pre-crisis peak, once the effects of high inflation are taken into account. | |
| PwC believes it is likely to be another seven years before inflation-adjusted prices catch up despite a return to house price growth that could bring the average cost of a home back to 2007 levels in cash terms by the end of next year. | PwC believes it is likely to be another seven years before inflation-adjusted prices catch up despite a return to house price growth that could bring the average cost of a home back to 2007 levels in cash terms by the end of next year. |
| Chief economist John Hawksworth believes prices will not take off because getting a foot on the property ladder still remains impossible for many. | |
| Even if economic growth is stronger than the 1% in 2013 and 2% in 2014 that PwC is forecasting, it would still take until 2017 for house prices to bounce back from their current level of 18% below the peak in real terms. | Even if economic growth is stronger than the 1% in 2013 and 2% in 2014 that PwC is forecasting, it would still take until 2017 for house prices to bounce back from their current level of 18% below the peak in real terms. |
| PwC warns that a weaker-than-expected recovery could see another decade of real-terms stagnation. | PwC warns that a weaker-than-expected recovery could see another decade of real-terms stagnation. |
| Barratt, which said the underlying prices of its homes were flat year on year, is expecting to increase the number of homes it builds from 13,600 in the last year to 16,000 by 2015 and has invested £3bn in land for development. But the extent of its land bank is still below a peak in 2008 and there is little slack with 400 sites in production out of a possible 550 in its portfolio. | Barratt, which said the underlying prices of its homes were flat year on year, is expecting to increase the number of homes it builds from 13,600 in the last year to 16,000 by 2015 and has invested £3bn in land for development. But the extent of its land bank is still below a peak in 2008 and there is little slack with 400 sites in production out of a possible 550 in its portfolio. |
| Without the release of public sector land, much of it derelict or surplus, the industry will be restricted to smaller plots sold by private landowners, said Clare. The industry is also hampered by a loss of production capacity after the banking crash, which forced thousands of small operators out of business. Clare said it was difficult for small firms to take on extra work while banks blocked access to loans and overdrafts that are needed for investment. Government figures show the number of homes built in the year to March in England was 108,190, down 8% on the year before and 49% below their peak in 2007. | Without the release of public sector land, much of it derelict or surplus, the industry will be restricted to smaller plots sold by private landowners, said Clare. The industry is also hampered by a loss of production capacity after the banking crash, which forced thousands of small operators out of business. Clare said it was difficult for small firms to take on extra work while banks blocked access to loans and overdrafts that are needed for investment. Government figures show the number of homes built in the year to March in England was 108,190, down 8% on the year before and 49% below their peak in 2007. |
| Private housebuilders have accounted for a growing proportion of the homes built in Britain in recent months following the government's Funding For Lending scheme, which cut the cost of borrowing and Help to Buy programme, which supports house building with loans that can be used for a deposit. | |
| Industry figures for May show 9,617 homes were completed in the private sector, the highest monthly figure for five years, while less than half that figure were registered in the public sector. | |
| Clare said there was no doubt the market was stronger amid improving consumer sentiment, greater mortgage finance availability and the Help to Buy scheme. | Clare said there was no doubt the market was stronger amid improving consumer sentiment, greater mortgage finance availability and the Help to Buy scheme. |
| His comments echoed those made by fellow UK housebuilders in recent days, as well as better economic data, which have signalled rising house prices and market activity. | His comments echoed those made by fellow UK housebuilders in recent days, as well as better economic data, which have signalled rising house prices and market activity. |
| The firm said in a trading update for the year to 30 June that profit before tax and exceptional items is expected to be £192m, up 73% and beating the top end of analysts' expectations. | The firm said in a trading update for the year to 30 June that profit before tax and exceptional items is expected to be £192m, up 73% and beating the top end of analysts' expectations. |
| Sales at Barratt have increased by 34.7% since Help to Buy was launched in April, and the company completed 13,663 homes in the full year, up 6.3%. | Sales at Barratt have increased by 34.7% since Help to Buy was launched in April, and the company completed 13,663 homes in the full year, up 6.3%. |
| The strong performance spilled over into the new year, with forward sales up 53.6% at £829.7m at 30 June. | The strong performance spilled over into the new year, with forward sales up 53.6% at £829.7m at 30 June. |
| Clare said: "Momentum is continuing to build and with forward sales up substantially, we are confident we can improve our performance still further in the year ahead." | Clare said: "Momentum is continuing to build and with forward sales up substantially, we are confident we can improve our performance still further in the year ahead." |
| The company said there had been improvement across the UK, but London and the south-east remained the strongest markets. | The company said there had been improvement across the UK, but London and the south-east remained the strongest markets. |