Major housebuilders’ profits up
Major Housebuilders report a leap in profits: The new build market is closely tied with the performance of the major (plc) housebuilders. In 2008-09, these housebuilders were largely in survival mode, but they have now largely restructured and recapitalised.
In the most recent financial results, Taylor Wimpey has reported a 164% rise in pre-tax profits, Persimmon’s are up 52% and Barratt’s half-year pre-tax profits are up 113%.
The builders have benefited from government backed incentives such as MI New Home and Funding for Lending scheme, which has, to some degree, increased mortgage availability and supported the sector. There has also been a shift in focus away from building city centre flats to family homes, which seem to be yielding higher returns. However, it is worth noting that this increased profitability has not led to any significant upsurge in new build volumes. Read the full article here.