Positive 2021 for Housebuilders

With a strong rebound after the pandemic, CALA Group is going above and beyond to deliver more homes than pre-Covid, with an estimated revenue of £1.25 billion for the first time. Preliminary results up to December 31st, 2021 are to be an expected 35% increase in pre-tax profit compared to 2019, along with their total home completions rising 19%.

These results are despite the constant shortages of labour, as well as the cost of materials rising with no hope of falling back down anytime soon.

However, with the stamp duty being suspended for just over a year and the 3-month long mortgage holiday, the construction industry is thriving, as more people are spending their expendable cash on renovation and are investing it into their properties.

CALA’S CEO Kevin Whitaker explained that “2021 has been a very successful year for the business, during which we have strongly rebounded to significantly exceed pre-pandemic 2019 volumes, revenue and pre-tax profit. We have seen many people making positive new home choices to seek out larger living spaces and this has driven very strong demand for our homes in aspirational suburban locations.”

Following on from Kevin’s point regarding people seeking out larger living spaces, Barratt has launched a report with national planning consultancy Lichfields that suggests housebuilders should be accounting for new flexible home working, with reports showing that since the Covid-19 Pandemic, millions of people across all age groups are hoping to make this a permanent move.

Although planning permission is hard enough to get approved, SME’s and other medium-sized developers might find this an uphill challenge in terms of fulfilling consumers’ demands for more space.

Stewart Baseley, HBF executive chairman, said: “Recent decades have seen a collapse in SME builders’ numbers and the survey shows the considerable challenges the sector continues to face. Every single SME I speak to is suffering badly from delays to the planning process. SMEs are literally having to put their businesses on hold whilst local authorities delay the start of construction as their planning departments don’t have adequate capacity to process applications effectively. Allied to concerns on materials and staff, planning delays threaten the demise of even more SME builders.”

On a positive note Vistry Group reports an excellent performance for 2021, completing nearly 2000 more units compared to 2020, and the housebuilding division’s gross margin to be in excess of 22%.

Commenting on its trading update, CEO Greg Fitzgerald said: “2021 has been an excellent year for Vistry Group with progress and success achieved across all areas of the business.”