Top 5 House Builders. Where are they now?
Many people choose to buy a new home every year and there are many benefits in doing so. The market is dominated by large national and international new home builders who build the majority of private new homes.When the market was good, house builders benefited from rising prices, profits and share prices. They also struggled to keep up with demand and government targets for new homes.
In 2007 the top 5 builders built 64,573 homes between them.
Ordered by units completed:
1) Taylor Wimpey-20,690
2) Persimmon Homes-15,905
3) Barratt Homes-15,517
4) Bellway-7,638
5) Redrow-4,823
Since the well documented credit crunch and associated property crash the fortunes of builders has changed dramatically.
Builders have found the value of completed homes fall rapidly, which has eaten into precious margins. As the value of land has collapsed there have been huge write downs on land banks. Most of the big builders are listed on the stock market and share values have been hammered over the last 18 months.
Despite huge losses and write downs most of the builders have restructured their debts and are hanging on by the skin of their teeth.
The result of all this instability has been an 18.5% fall in homes completed in 2008 (52,665) by the top five builders.
This now make Barratt Homes the UK’s biggest builder by volume:
1) Barratt Homes- 18,588
2) Taylor Wimpey- 13,394
3) Persimmon- 10,202
4) Bellway-6,556
5) Redrow- 3,925
Overall there were 72,114 private sector builds started in 2008, showing a 56 per cent decrease on 2007 (163,535). The expectation is for even fewer properties to be completed in 2009.
What is the effect on the average house buyer?
Property prices have fallen across the country making new build homes more affordable. However job security and difficulties obtaining mortgages are keeping many buyers out of the market, even though prices have fallen drastically.
Builders are desperate to complete and get cash and therefore are more flexible on sale price and are offering more incentives. Some very good deals are available if you are in strong position to negotiate.
Unless you are an investor or first time buyers the chances are you will have a house to sell. With such difficult market conditions this may be a big hurdle to buying a new home and getting a good deal.
One option which is often considered is part exchange. Certain developers will offer to buy your house in order for you to purchase their new home. However in the current market many part exchange schemes have been withdrawn or are severely limited. This leaves many people with no option other than to stay put.
Fortunately Quick Move Now’s part exchange service is independent of the builder and is still fully available. The service is flexible and allows you to sell your house and buy either a new or second-hand house.
*Data compiled from company annual reports/accounts for 2008.
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