On the back of the news this week that Barratt has agreed to buy Redrow for £2.5bn, Bull and Bear discuss the growing consolidation of the UK house building sector and explore the challenges faced by house builders at the other end of the size spectrum.
The time taken to achieve an outline permission has increased fourfold since the early 1990s, whilst the associated costs of obtaining a planning consent have risen too. The politicisation, and associated risk associated with achieving planning permissions has also increased, exacerbated by a lack of public sector capacity. The result of all this for SME house builders is draining.
In 1988, SME builders built 40% of all homes. In 2020, it was just 10%. The loss of SMEs is affecting the UK's ability to meet its house building targets.
Enjoy your Sunday.