Half of housebuilders in financial danger

Nearly half the country’s housebuilders are in financial danger, according to the latest data from industry analyst Plimsoll.

Its survey of the top 1000 UK housebuilders found 496 were in trouble and the report said not all of them would survive.

It said: “Of those companies who do survive, very few will be in their current shape and many will be in the hands of new owners. This further supports the argument that despite the obvious tragedy of job losses, livelihoods lost and the pain of a business in decline this period is inevitable and can only be good news for the market in the long run.”

Out of the 496 firms on the danger list:

• 287 increased their debts last year
• 336 saw profits fall last year
• 198 are losing money
• 282 managed increased sales last year
• 245 were set up over 10 years go

Senior analyst David Pattison said: “There is no doubt that recessions catch bad businesses out. Those companies that have entered this period ill-prepared have placed themselves at a distinct disadvantage. Many have grown used to running their businesses on high-risk business models, propped up largely on finance. Should we just let them fail?”