Latest news with #Molior
Yahoo
15-07-2025
- Business
- Yahoo
Housebuilding giant hit by London exodus as sales slump
One of Britain's biggest housebuilders has warned of weaker-than-expected sales as buyers shun London. Barratt Redrow sold 16,565 homes in the year ending June 29, falling short of a forecast of between 16,800 and 17,200 that it had set out in April. The developer cited 'fewer international and investor completions than expected' in London, adding that 'homebuyer confidence remains fragile and mortgage rates remain high compared to recent years'. The housebuilder stated: 'The London housing market has been particularly challenging with weak demand from both domestic and international homebuyers.' London's housing market has slumped after the Chancellor ended stamp duty discounts in April. Mortgage rates have also stayed higher than expected, which has dented affordability. These have resulted in a wave of price reductions across the capital. Shares in Barratt Redrow fell by as much as 13pc in early trading before recovering to around 8pc in the mid-morning. Around £778m has been wiped off its value. Barratt Redrow said it expected to sell between 17,200 and 17,800 homes in its 2026 financial year, reflecting 'revised expectation of broadly flat average sales'. None the less, it noted that mortgage market competition and availability have improved. The bill for repairing safety defects on high-rise homes, required to avoid another Grenfell-style cladding disaster, has also risen by around £98m to total £248m after discovering issues at buildings within its southern division and at a large London development. It said it will pursue its subcontractors to recover those costs. However, the developer said it will deliver profit in line with market expectations, which will be shared in future trading updates. David Thomas, chief executive, said: 'Although demand during the year has been impacted by consumer caution and mortgage rates not falling as quickly as hoped, there remains a long-term structural under-supply of housing in this country. 'We remain confident in our medium-term ambition to deliver 22,000 high-quality homes a year, and in the long-term demand for our high-quality homes.' The news comes after findings by Molior showed sales of new-build homes in the capital plunged to their lowest level since the global financial crisis. The decline, which was more pronounced over the past three months, was blamed on the insufficient financial incentives for property developers to build new homes and for buyers to acquire them. This has led to fewer developments and sales. Last week, rival housebuilding giant Vistry posted a profit drop of a third to £80m for the first half of the year, after issuing a string of profit warnings in recent months. It reported 6,800 home completions for the six months ending June 30, down from 7,792 in the previous year. Vistry cited sluggish demand from its affordable housing partners on the back of funding constraints and uncertainty ahead of the Chancellor's June Spending Review, but outlined its hopes that the Government's £39bn affordable homes strategy will boost its business. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
Yahoo
12-07-2025
- Business
- Yahoo
London new-build home sales suffer ‘catastrophic' plunge
Sales of new-build homes in London have slumped to their lowest level since the global financial crisis. Just 3,946 new private and build-to-rent properties were sold in the capital between January and June this year – a fall of nearly 30pc compared to the same period last year, according to research from Molior. The slump has been more pronounced over the past three months, with only 1,691 homes sold in April, May and June. That is the lowest level since the global financial crisis, when 1,549 new build properties changed hands in the third quarter of 2009. Just over 3,300 were sold in the first half of that year. The decline has been blamed on the insufficient financial incentives for property developers to build new homes and for buyers to purchase them, leading to fewer developments and sales. Tim Craine, founder at Molior, said the fall was 'catastrophic' and blamed London's City Hall for deterring more new homes from being built. 'The market is now as bad as it was in early 2009, perhaps the early 1990s. But at least back then, the market was allowed to function,' he said. Crucially, Mr Craine said the Greater London Authority, the body that governs London, was negotiating 'too hard' in demanding higher taxes from housing developers to fund affordable housing – putting developers off building more homes. He said that 'if developers can't sell homes, they won't build them'. He added: 'Remember, the Soviets used to set the price of bread. Guess what? No one made any bread. This is the same kind of thing.' The plunge in sales has major implications for the Mayor of London's target of building 88,000 homes per year – with the latest total representing only 9pc of 44,000 homes at the half-year mark, Mr Craine said. Efforts made by the Government to resolve supply-side delays through reforms to the planning system and at the Building Safety Regulator will still leave 'a significant demand-side problem', he said. Charlie Hart, from property consultancy Knight Frank, warned that over-regulation was 'stifling delivery' from property developers. He said: 'Without urgent address by both central Government and London City Hall, the capital's development, construction and other associated sectors – a cornerstone of its economy – are at high risk of failure. 'Immediate action is needed to relieve the pressure, and both buy-side and supply-side reform will help unlock delivery as well as demand.' Mr Craine added that the situation was made worse by a lack of discounts to incentivise domestic buyers who purchase off-plan, several of whom have already been 'pushed out' of the market by the Chancellor's stamp duty increases, and persistently high building costs. He said an increase in sales, driven by more demand-side initiatives, will give developers 'the confidence to start building again at pace'. The news comes after house prices across the UK stalled in June, according to Halifax, amid a slowdown in the jobs market and concerns about the economy. In 2009, the UK's property market was hit by a global slump in house prices, triggered by the US subprime mortgage crisis. Britain also endured a housing crash in the early 1990s, driven by rising unemployment and high interest rates. The Mayor of London's office was contacted for comment. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
28-05-2025
- Business
- Yahoo
'Sadiq Khan's green belt U-turn threatens Bromley's countryside'
When Sadiq Khan first ran for Mayor of London in 2016, he made a clear manifesto pledge: "I will oppose building on the green belt, which is even more important today than it was when it was created." Now, he's looking to build on swathes of green belt land surrounding London, including Bromley — the borough with the largest green belt and more farms than anywhere else in the capital. This huge policy reversal betrays many Londoners who took him at his word when he made this manifesto promise and separately pledged to be the "greenest mayor ever". Despite having vast planning powers and substantial government funding, Mayor Khan hasn't delivered the homes London needs. He's now looking for a quick way out. His current London Plan — the capital's strategic planning document, which local authorities must follow — sets a target of building 52,000 homes annually. However, housebuilding has fallen far short of this target, with fewer than 34,000 homes built on average per year since 2021. An independent review of Mayor Khan's planning policies under the previous Conservative government revealed the reason for this failure. The experts warned that his policies "work to frustrate rather than to facilitate the delivery of new homes on brownfield sites". It added that without changes, "the current housing crisis will continue, if not worsen". Sadly, the situation is getting worse. New data from the analysts Molior found that developers started work on only 1,210 new homes in the first three months of this year. Housebuilding in London isn't accelerating but is declining under Mayor Khan. After nearly a decade at the helm, Mayor Khan is facing a crisis of his own making. The new Labour government has imposed a target of 88,000 homes for London — more than twice the current rate of delivery. The capital needs these homes, but Mayor Khan is looking for a way out. But Labour's plan to move housebuilding from inner London, where the infrastructure is world-class, to Conservative-voting suburbs and rural villages in outer London is not as easy as Mayor Khan thinks. Bromley may have a substantial green belt, but it's poorly connected and has little existing infrastructure. If Mayor Khan builds thousands of new homes in the middle of fields, roads, schools, nurseries, and GP surgeries will need to be built. But developers won't be able to pay for all this and meet the requirement that half of the homes be affordable. Labour just don't understand life in outer London. One Labour MP was surprised to learn that Biggin Hill has no train station. While Bromley town centre has excellent rail connections to central London, it doesn't enjoy the orbital connections it needs with neighbouring towns and villages. They think it's the same as inner London; it's not. If Mayor Khan is serious about building new homes, he needs to address his failed policies that have frustrated housebuilding within inner London. Breaking his promise and building on the green belt is not the housing panacea he thinks. It's a recipe for unsustainable urban sprawl and the loss of London's precious remaining countryside.
Yahoo
19-05-2025
- Business
- Yahoo
The real reasons why Sadiq Khan has failed to fix London's housing crisis
The message could not have been clearer. In his 2016 manifesto for his first mayoralty Sadiq Khan laid out his position: 'I will oppose building on the green belt, which is even more important today than it was when it was created.' How times have changed. Last week in a speech that represents one of the biggest shifts in planning policy in and around London since the post-war period, the Mayor was singing a different tune. He admitted he had shifted his opinion of what he once described as the 'sacred' status of the green belt, saying current protection is 'wrong, out-of-date and simply unsustainable'. So what has brought about this remarkable volte-face? The simple truth is that the housebuilding model in London is broken. Starts on new homes in Europe's biggest metropolis have virtually ground to a halt. The figures are truly astounding. According to sobering data from analysts Molior, private developers started work on just 1,210 new homes in the first three months of the year, a tiny sliver of the 88,000 new homes a year envisaged by the London Plan over the next decade. The comparison with a decade ago is stark. In the first quarter of 2015 work started on 9,117 new unsold homes — a good indicator of developer confidence — at 100 major sites. In the first quarter of the year this had dried to a dribble, with a meagre 323 starts on new unsold homes, at just six sites. It is the same gloomy story for affordable housing, most of which is delivered by private developers working with housing associations and City Hall. Latest GLA data shows work began on just 4,411 new homes designated affordable in the year to April, up slightly from the previous year when the total was just 3,244, but hugely down on the 27,824 in 2022/23. So what has gone wrong, why have we stopped building homes in London? The question is more than an academic one. The need in London is as acute as it has ever been, not just for those currently without permanent housing, stuck on ever-lengthening council waiting lists. But as the Mayor recognised in his speech on planning last week, an entire generation risks being locked out of the security enjoyed by their parents. As he put it: 'We have young professionals stuck living in their childhood bedrooms for years on end; Londoners having to endure cold, damp accommodation that isn't fit for human habitation; couples reluctantly moving out of the capital to start a family; and London primary schools closing because young families have been priced out of the area.' There could also be a severe political cost to be paid. Keir Starmer has little chance of fulfilling his promise of building 1.5 million new homes over the course of the parliament if London's construction sector is not firing on all cylinders. Labour will pay a heavy penalty at the general election ballot boxes in 2029 if they do not go into the campaign able to say they have delivered on the housing pledge at the heart of their offer to the country in 2024. Experts say housebuilding has become so alarmingly bunged up for a number of reasons, some external and unavoidable and some entirely self-inflicted. Tim Craine, the founder and director of Molior London, said: 'When it comes to London housebuilding, all the stars are aligned in exactly the wrong way. The cost of bricks and mortar is inflated, the costs of labour is inflated, interest rates are also inflated, there is all manner of inflation. When the costs are all stacked up like that there is nothing left in the margin to be divvied out.' I've got £1bn invested but I can't start building because of Gateway 2 A London housebuilding boss But on top of that are also a myriad well-intentioned political decisions, all taken for good reasons, that have stopped the numbers adding up. Housebuilders are having to meet ever more demanding regulatory requirements, all of which nibble away at schemes' viability. There is particular concern over what are known in the trade as 'Gateway 2' approvals. This is the sign-off that a developer needs for any building over seven storeys high from the Building Safety Regulator set up by Michael Gove in 2022 following the Grenfell disaster. Without that signature, construction cannot begin, but there are huge backlogs that are strangling progress on construction. As one exasperated London housebuilder boss put it: 'I've got £1bn invested in London but I can't start building anything because of Gateway 2.' A model for London housebuilding that proved particularly successful, if unpopular with the public, in the early years of the century — selling homes off-plan to foreign investors to underpin the funding of the scheme — no longer works. It has been destroyed by ever higher stamp duty and other tax rates imposed by chancellors looking for an easy revenue hit and egged on by public disquiet over empty 'buy to leave' developments. The coup de grâce was Jeremy Hunt's abolition of non-dom status. Be careful what you wish for. Now the rich foreigners who piled into central London in the years of plenty are selling up and quitting the UK. There will be few violins, but they also helped pay for the affordable housing that London now simply cannot produce. Ian McDermott, vice chair of the G15 group of housing associations and chief executive of one of London biggest players in the sector, Peabody, called the current situation a 'perfect storm'. He said: 'This is the most challenging environment we've ever worked in. Standards have changed since Grenfell, the cost of building has gone up and the shortage of labour is a real problem. 'Our ability to support and fund development has come down because we're spending more money on building safety and maintenance and management of homes.' According to Craine the situation is now so entrenched that 'it will take two decades to sort out and in that time the quality of life in London will go down'. So can easing planning controls on the green belt unblock the log-jam? According to property experts it will help, but it will take time and can only be part of the solution. Adam Cradick, executive director at agents CBRE, said: 'The combination of viability challenges plus planning and regulatory delays has resulted in a total collapse in supply of new homes across the capital. So while green belt release is a helpful part of the solution, further urgent steps still need to be made.' A spokesperson for the Mayor said: 'The disastrous inheritance from the previous government has left national housebuilding on its knees, with developers predicting housebuilding could fall to the lowest level since the Second World War. 'The Mayor is determined to work hand-in-hand with the Government to support their ambition to get Britain building again. Last week he announced that he is exploring how parts of the green belt can be used for house building, as well as investigating different approaches to increase the number of small and medium sized building companies, who in decades past have been far more prominent in delivering London's new homes.' Everyone who cares about London's future will have to hope that his efforts will prove successful, because without enough new homes the capital simply cannot thrive. Sign in to access your portfolio
Yahoo
09-05-2025
- Business
- Yahoo
Sadiq Khan plots tower blocks on London's green belt
The countryside on London's outskirts could soon be concreted over to make way for tower blocks as Sir Sadiq Khan throws his support behind building on the green belt. The Mayor of London will on Friday announce plans to release more of the capital's green spaces for housing as he launches a consultation on the city's development strategy for the next two decades. Sir Sadiq is expected to argue that parts of the green belt 'can often be low-quality land, poorly maintained and rarely enjoyed by Londoners' and would be better used as housing. The mayor will say in a speech in Greenwich: 'Development on carefully chosen parts of the green belt – done in the right way – would allow us to unlock hundreds of thousands of good-quality new homes for Londoners. 'This would not only go a long way to ending the housing crisis but provide a huge boost to our economy.' It represent a U-turn in his stance, having staunchly opposed green belt development in previous years in favour of construction on brownfield sites. However, the change of heart comes as Sir Sadiq scrambles to hit has target to build 88,000 homes per year. His existing plan is only delivering around 40,000. Recent findings by research company Molior show housebuilding in the capital has slumped to its lowest level since 2009, with works starting on just 1,120 private homes in the first quarter this year, and no works starting in 23 of London's 33 boroughs. The move to open up London's green belt sparked an immediate backlash from campaigners and the Conservatives. Alice Roberts, at CPRE London, the countryside charity, said: 'Our green belt is incredibly valuable. It's a home for nature, it's the countryside next door, it's important for agriculture close to the city, it's incredibly important for climate because of the need to plant trees, to absorb rainwater, to manage rainwater and surface flooding. There's no more important time to keep our green spaces green.' David Mooney, chief executive of the London Wildlife Trust, said: 'We will fight hard to protect our nature-rich green belt and hold the mayor to account to make absolutely sure only the right sites are selected, and that nature is not shoved out the way.' Susan Hall, leader of the City Hall Conservatives, said: 'Once again, Sadiq Khan has shown his true colours by dancing to the tune the Labour Government sets. 'This is a mayor who will sacrifice London's precious green spaces to appease his Labour paymasters. 'Londoners elected him on a promise to protect our environment, but it's now clear those promises weren't worth the recycled paper they were printed on.' Andrew Boff, who represents the City Hall Conservatives on planning matters, said: 'The mayor has repeatedly stood in the London Assembly chamber and given categorical assurances that he would protect London's green belt. 'This announcement is a complete betrayal of those promises and shows utter contempt for Londoners who treasure these vital green spaces.' A review is already under way in City Hall examining the scope to build on so-called grey belt land, but the mayor's plans are expected to go further than this. A spokesman for the GLA said the focus will be on low-quality, poorly-maintained land rarely accessed by Londoners, with scope to build high-density housing and good transport links. Earlier this year, Sir Sadiq was accused of presiding over a 'crusade' to build on parks in the capital, after a row broke out over suggestions from Transport for London to release historic land in Enfield for more than 10,000 homes. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more.
