Housepresso 27 June 21
All you need to know about the housing market this week in one quick hit
Housing transactions dip in May
According to the latest data published by HMRC housing transactions fell by 4% in May, although they remain around 15% head of pre-pandemic levels. But, are these elevated levels due to a housing market recovery? The vaccine rollout or the Stamp Dut Holiday?
Choose your grandparents well
Move over bank of mum and dad, move-in bank of gran and grandad. According to research from equity release adviser Key, the Bank of Gran and Grandad has gifted close to £1m a day during the stamp duty holiday, according to data collected by Key. Since the start of the stamp duty holiday, older homeowners have gifted £323.9m worth of their own housing equity to help younger family members buy their first home or move up the property ladder.
Light at the end of the leasehold nightmare tunnel
The leasehold and ground rent scandal is not the UK housebuilding sector’s finest hour. However, to be fair to the housebuilders the facts were not hidden, but perhaps they could have been more clearly explained.
As reported by the BBC yesterday Persimmon and Aviva have agreed to change the way they operate, both offering retrospective solutions. This suggests that with hindsight they agree the terms of the leases could have been clearer, or with foresight, the reputational costs of not doing so significantly outweigh the costs of doing so. But will other developers and ground rent portfolio managers follow?
Berkeley Group 1 Pandemic 0
Homebuilder Berkeley Group which serves London and the South East released its results for the year ended 30 April 2021 this week. The number of homes sold up 4% to 2,825. Revenues up 14.7% to £2.2bn. Profit before tax up 2.8% to £518m
Very few companies could deliver the results Berkeley Group have in the year ending 30 April 2021. In a period covering lockdowns one, two and three Berkeley Group has grown revenue, grown profits and increased the number of homes it sold. We may have embraced working from home, but it appears that not all are leaving London and the South East in search of a rural idyll.
Looking ahead Berkeley has a very strong Balance Sheet, a strong order book and more than £1 billion of cash in the bank. If Berkeley were playing in Euro’s it would be Berkeley 1 Pandemic nil.
Crest swings into profit
Crest had a tougher 2020 than most of its peers, but it has now had the jab and the vaccine is working. In the half-year, its home sales are up 31% and profit after tax up 700% and the outlook for the full year looks just as healthy. Crest has used the lockdowns to its advantage focusing on internal issues and as lockdown eases it has emerged all the better for it