16/07/2009 by David Slade.

Housebuilders are starting construction again, but it will do little to increase historically low levels of output this year.

While several of the major housebuilders released positive trading updates last week – in which they confirmed they would once again start work on new sites – the build programmes are unlikely to push output beyond forecasts of 70,000 new homes in 2009, serving only to replenish dwindling stock levels.

Barratt told shareholders it had 822 unreserved stock units at 30 June, which equates to just less than four weeks’ supply at current sales rates. The figure is down 55 per cent from its 1,821 units at 30 June, 2008.

Bovis Homes has 480 finished homes left, just over half the 754 homes it sold in the six months to 30 June, and well down on the 1,000 it had at the beginning of the year.

Galliford Try has just 80 completed stock units left to sell, compared to 280 a year ago.

And Persimmon said it has 390 sites with stock remaining compared to 460 this time last year. The firm said it now plans to start work on a further 50 new developments over the next six months.

MF Global house building analyst Andrew Gardner said: “The housebuilders have perhaps run down stocks a little quicker than expected.”

But Home Builders Federation director of external affairs, John Slaughter, said he still expected the 2009/10 financial year to be a low point in terms of homes built.

Panmure Gordon analyst Rachael Waring said: “This is a very key point in time for the housebuilders.

“They have got to carefully manage how many new sites they start with the demand for homes. They do not want to find themselves back at the banks in six months’ time looking to borrow more money.”

The Construction Products Association has upped its forecast for homes built in 2009 to 72,000 from 70,000.

The Association forecasts 2010 will see a further increase in production with 99,000 homes built, but it is still well down on 2007’s 182,000.

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16/07/2009 by David Slade.

The Government has today announced plans to progress with four eco-town schemes across England.

The successful bids – which will still have to obtain planning approval – were named as Rackheath in Norfolk, Whitehill Bordon in East Hampshire, north west Bicester and the China Clay Community scheme near St Austell, Cornwall.

Government officials today said that all four projects were supported by local authorities and met the standards for an “eco-town”.

Housing minister John Healey said that a further two projects - Rossington in South Yorkshire and North-East Elsenham in Essex - still had the potential to be eco-towns, but required more work to iron out certain issues with the bids.

The four “first-wave” settlements will be able to bid for a share of £60 million in Government support for local infrastructure.

Mr Healey said he wanted to see at least six “second-wave” developments. He said up to £5 million was being made available for councils to conduct further planning work on proposals.

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16/07/2009 by David Slade.

Builders’ workloads are continuing to fall, dispelling talk of any potential green shoots of recovery.

The latest Federation of Master Builders survey - of 400 small-to-medium construction firms over April, May and June - has found that 49 per cent of builder’s suffered declining workloads for the quarter.

Only 3 per cent reported an increase, with FMB bosses saying the results show that market conditions remain tough and there is no real growth returning to the construction sector as a whole yet.

But, like several other recent indicators, the survey did reveal evidence to suggest the recession in the construction sector may be beginning to bottom out.

The results show a general slowdown in the rate of decline in employment, workload and enquiries in the second quarter of the year. The gap is forecast to narrow further still over the next three months.

FMB director general Richard Diment said: “The survey shows just how far away from green shoots we actually are and there is a massive difference between things getting worse at a slower rate, and things actually getting better.

“Although the rate of decline does seem to be easing and may even be starting to bottom out, we are not out of the woods yet, and it is vitally important that the Government takes urgent steps to pave the way for genuine recovery.”

STILL SKILLS SHORTAGES

Despite continued contraction of construction output and falling staffing levels, there remain skills shortages for a number of trades.

Firms engaged in the survey highlighted they had difficulties recruiting carpenters/joiners, plumbers and HVAC trades and electricians.

The FMB said “it is interesting that there are any problems at all, given the widely reported numbers of job losses”.
Some 40 per cent of FMB builders said they had to reduce staffing levels over the quarter, while 51 per cent reported no change.

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