Downturn hits housebuilders again

Housing reservations have dropped by almost two-thirds compared with this time last year, according to the latest figures from the Home Builders Federation (HBF).

The weekly statistics, released to HBF members but not published – but covered in Building magazine - showed the number of offers on houses was down 63% to 430 last week.

Construction News (CN) spoke to HBF chairman Stewart Baseley, who said the government’s recent measures to help mortgage lenders might not be sufficient to increase construction work.

While he welcomed the government’s intervention last month by providing £50bn to improve banks’ liquidity, he warned: ‘If housing transactions decline it is obvious what will happen. In the event of the situation persisting for a serious length of time it could have a serious effect on the industry and the jobs of those that work in it.’

The news came after Persimmon said it would be pausing work on 30 sites across the UK in efforts to ‘manage cash more effectively.’

Persimmon opened just 90 of its 120 construction sites after a drop in housing demand, although it told Contract Journal that it plans to resume work on remaining sites when ‘the mortgage market improves.’