UK housebuilders in focus as construction woes cloud outlook

Independent

9 hours ago

UK housebuilders will be in sharp focus as the sector grapples with construction woes, despite the Government ploughing ahead with plans to stimulate more building.
Persimmon and Balfour Beatty will announce their half-year results on Wednesday, and Bellway will provide a trading update on Tuesday.
York-based developer Persimmon said in May that forward sales – meaning homes ordered but not yet bought – had surged by 17% over the first three months of the financial year, compared to the previous year.
It was expecting to complete the sale of between 11,000 and 11.500 new homes over the year, which would be significantly more than the roughly 10,670 it sold in 2024.
However, experts said Persimmon was among the builders fighting issues 'outside of its control' in the wider property sector.
Richard Hunter, head of markets for Interactive Investor, said: 'It remains to be seen whether the momentum has continued into the half-year results, or whether slowing construction activity and mortgage availability concerns remain uppermost.
'Even so, the group should eventually benefit from the extreme supply and demand imbalance in the UK, while government reforms should also prove to be a tailwind.'
The Labour Government has been pushing to introduce new planning reforms to help meet its pledge to build 1.5 million homes this Parliament.
The Planning and Infrastructure Bill, which is making its way through the House of Lords, includes mandatory housing targets and reforms to planning rules to make it harder to reject developments.
City analyst Michael Hewson said: 'With the current Government vocal in its commitment to ramp up a housebuilding programme, you would think that housebuilders would be reaping the benefits of that.
'Sadly, the reality is somewhat different, especially where governments are involved.'
He pointed to recent survey data from S&P Global, closely watched by economists, which showed UK construction work dropping at the fastest rate in more than five years in July.
This was partly driven by a fresh slump for residential housebuilding, which had been showing early signs of a rebound.
Construction firms said there was a lack of opportunities for new work, and hesitancy from customers to commit to projects, while some had been buying fewer materials.
Meanwhile, investors will also be looking to Bellway's trading update to see how it is navigating wider sector challenges.
In June, the company lifted its forecast for the number of homes it will build this year, while also reporting an increase in the level of forward sales it secured.