A recent report from Sheffield Hallam University revealed the scale of soaring profits at the UK’s biggest housing developers. The research, carried out by Sheffield Hallam’s Centre for Regional and Economic Social Research (CRESR), analysed the financial records of the nine biggest housebuilders between 2010 and 2015 and found startling results.
The nine biggest housing developers, who build nearly half of all new housing, increased their housing output by 33% from 2012-15. At the same time, revenue grew at more than twice this rate, increasing by 76%, with profit before tax rising by a staggering 200% in this period.
The research also showed that end of year profits for the biggest five firms (after taxation, impairments and exceptional items are taken into account) increased from £372m in 2010 to over £2bn by 2015 - an increase of over 480%. Furthermore, dividend payments to shareholders in 2015 by these firms amounted to 43% of yearly profits, raising questions about the levels of reinvestment in housing production taking place.
However, the Secretary of State for Communities and Local Government, Sajid Javid, recently called on these companies to release some of their land banks. Javid, who claims that housing is his ‘number one priority’, is expected to deliver a Government white paper in the next few weeks laying out his plans to tackle the current housing crisis.