This week has seen four of the UK’s major housebuilding companies publish their annual reports and accounts. One has just been sold to a USA hedge fund. The business press has been kind to the companies, mostly because they have returned to profit and can pay a dividend again.
But at a price. 2012 was the third-lowest year for building new houses in the UK since 1947. All the companies have massively scaled back their volume of work in the UK, though some are still strong in the Arab states. Mostly the companies have shed many staff, are now building mainly small numbers of higher-value properties and then only south of Cambridge. To remain profitable the companies have had to become smaller niche builders.
This is bad news for the UK economy and for growing families. If this collapse continues we risk housebuilding going the same way as the manufacturing sector – local decline followed by growing imports.
To date the idea of importing new houses has seemed too daft to seriously consider. However, with modern methods of construction including 2D panels and 3D modules made by offsite manufacturing, as is already commonplace in Germany and elsewhere, it will only seem a daft business idea until the new profits start to roll in. Singapore could well become the UK’s volume housebuilder.