Assetz® News » HOME | RSS Feed FEED | LIST ALL ARTICLES | ASSETZ HOMEPAGE
Investment Property News from Assetz

Assetz® Property News Service

House Builders Start Building Again

21st August 2009 | back to article listings BACK    print this article PRINT

Surprisingly strong data was released this week showing that just short of 30,000 new houses were started in the last three months. Over the last 12 months a mere 87,000 new houses were started. The government target as most people know is 240,000 new houses a year. If housebuilders keep starting 30,000 new houses a quarter then we will be running at 120,000 new properties being built a year although this is just half the government's target of 240,000 homes.

The problem is that there may be a complex reason behind this 63% jump from the number of new houses started in the prior quarter. Many housebuilders have run out of stock and have been selling at below cost price to investors in order to keep cash flow moving. Is this sudden increase in new starts to supply homeowner demand or to keep cash moving with investor sales ? We think there is a big bias towards the latter.

Many housebuilders have run out of finished stock in many of their regions around the country and with nothing to sell their cash flow will dry up and they may need to continue with further staff cuts. An alternative is to build more stock and sell it to at least cover ongoing overheads but perhaps not cover previous land purchase costs etc.

Of course, with the residential market place beginning to improve from a sentiment perspective, as well as volumes, and lending improving month after month now, homeowners will take up a reasonable percentage of these new properties but without a doubt investors will continue to play a significant part in providing cash flow for builders in this strengthening market.

This news story has come from the property investment blog by Stuart Law, CEO Assetz plc.

Assetz® is a UK and International Property Investment Specialist. Please visit our property sites shown below.

Assetz for Investors UK Assetz Hotels Assetz Homes Assetz International Assetz France Assetz Spain Assetz Cyprus Assetz Germany Assetz Portugal Assetz Ski Assetz Cape Verde Assetz USA Assetz Finance Assetz Fund Management

Accessing the news service

You can view all of the Assetz® UK, International and UK Property Investment Articles and News here.

We also provide an RSS Feed Feed of the news service, or you can view all articles. Click here to view more information on RSS readers and how they make reading online news more convenient.

eXTReMe Tracker