Cala welcomes £2bn Tory housebuilding plan

The The boss of upmarket housebuilder Cala Group has welcomed the government’s plan to borrow an extra £2bn to “accelerate” housebuilding on brownfield sites.

Speaking to Building after the publication of his firm’s annual results, Cala chief executive Alan Brown said the housebuilder will “definitely have a look” at the scheme, with over two thirds of its homes built on brownfield land.

Chancellor Philip Hammond announced £2bn of new public borrowing at the Conservative party conference to fund an Accelerated Construction Scheme which will make public land with planning permission available to builders.

Brown said: “Contrary to popular opinion, 67% of the homes we build are on brownfield sites. We’re interested in anything that will help with housebuilding. We’ll definitely have a look at it.”

The chancellor’s announcement came as housing and planning minister Gavin Barwell signalled that the government is set to allow councils to charge higher fees for handling planning applications in order to speed up the process.

Brown said he welcomed the plans, but with a caveat: “My concern is that we need to make sure fees are used by local authorities to staff up their planning departments, which hasn’t always been the case in the past.”

In full-year results to June 2016, Cala posted an 18% jump in pre-tax profit before exceptional costs to £60.1m, up from £50.9m the previous year.

Revenue rose 15% to £587.1m, up from £511.6m, following the second full year contribution from acquired English builder Banner, bought in March 2014.

The average selling price of Cala homes rose to £538,000, up from £509,000, while its operating margin remained the same at 14.3%.

Cala finance director Graham Reid said the housebuilder had “certainly not seen any Brexit impact”, with some difficulties at the top end of the market related to stamp duty changes instead.

Reid said: “Selling has been strong, 46% up compared to the previous. We had 20% more sites so you’d expect that, but even so we’ve done surprisingly well.”

The firm also said there was no timetable for an exit strategy for its owners, investors Legal & General and Patron, who acquired the firm in 2013. Brown said the company’s focus was on achieving its £1bn turnover target.