Is the UK Property Market Dead? Slow, Not Crashing | Propenomix Live

I like to start with a quote anyway usually, and this week's was, um, "While we will be judged for a year or two by the number of houses we build, we shall be judged in 10 years' time by the type of houses we build." And that was Nye Aneurin Bevan, uh, the Minister for Health in 1946, uh, round about the time of the start of the NHS, apart from anything else.

And I wonder if Nye knew just how prescient that quote might be, as I've been talking about for the past 15 years.

You know, we just do not have enough two and three-bed properties in the UK, especially houses.

Um, we do a little better for flats than we do for houses.

But at the moment, with big news like Taylor Wimpey pulling out of London, saying London development is no longer viable, you do wonder who will be listening and what anyone is gonna do there, still clinging onto the, the good old days, where I think everybody thought it was a third, a third, a third for the land, the build, and the profit.

And in the real world these days, you've got people at planning committees turning down Berkeley Homes because they're worried the 17.5% profit they're gonna make o- on a project is too large, not considering the amount of time, apart from anything else, that might go into making 17.5% margin on a development.

It's quite ridiculous, but that's, that's where we live at the moment.

And of course, um, whilst I've said before, it doesn't make a huge amount of difference really if we build half a percent of the housing stock or 1% of the housing stock each year.

That's the sort of boundaries of 150,000 to 300,000 homes.

That's the, the boundaries we very much live within.

At the moment we live more towards the lower end of that, more towards the sort of 200,000 mark, apart from anything else.

Um, but it is the signals that it sends to the, to the whole of the, the sector, apart from anything else.

And of course, the government will be hoping that having announced Your First Home, the rebadged version of Help to Buy, that will be making a positive difference to new build figures, but then as Taylor Wimpey move out of London, doesn't sound like a, a positive difference in terms of new build completions, does it, aside from anything else.

So, uh, we've had some news in this morning from Bellway.

Uh, full year, uh, they've done 9,700 completions nearly, and next year they've cut their guidance to 9,000 from 9,400.

So as you can see, they're dropping about 8% on this year, which has not been a famous year for, for delivery as it goes anyway.

Uh, Bellway's operating margin down to 10.1%, down from 10.9, expecting to fall further.

And their order book down to 4,981 from 5,285.

But their underlying pre-tax profit, 305.7 million, up 5.7%.

I'm sure that's what the, the negatives around the industry will, will focus on, I suppose.

Using 150 million to buy shares back.

Um, shares in house builders have dropped dramatically over the past couple of years.

Um, not that I'm n- necessarily blaming that on the Labor government.

This was all in the pipeline anyway in terms of what's happening, but Labor have failed to do anything apart from sort out planning.

And indeed, they've introduced new and more costly regulation and failed to sort out the regulation that was introduced by the last government that was frankly wrong or at least anti-development at the very least.