British House Building Industry

Part of Uk Shared Prosperity Fund – in the House of Commons at 3:45 pm on 5th September 2019.

Alert me about debates like this

Photo of Siobhain McDonagh Siobhain McDonagh Labour, Mitcham and Morden 3:45 pm, 5th September 2019

The social and financial cost of homelessness far exceeds what we spend on temporary accommodation, which was £1 billion of taxpayers’ money last year—every £1 of it badly spent. Some 6,980 families in my constituency are trapped in bed and breakfast accommodation, having been there longer than the six-week legal limit, including 810 children. Others are stuck in hostels far away from their schools, families and friends.

Some of my constituents are housed, at least temporarily, in Connect House, a warehouse on the busiest south London industrial estate. For anybody who wants to see what Connect House looks like, please have a look at the video on my Twitter account.

I am just crawling through my speech, because I see more and more people here.

Other families who have come to see me are on the ever-expanding waiting list, with 1.2 million families across our country now waiting for a place to call home—1.2 million. Just 6,464 new social homes were built in 2017-18, the second lowest number on record. At that rate, it could take 172 years to give a socially rented home to everyone on the current waiting list. That is utterly appalling when we compare those figures with the 150,000 social homes delivered each year in the mid-1960s or the 203,000 council homes that the Government delivered in 1953. It has been done before and we all know that we can do it again.

In Merton, where my constituency is based, 10,000 families are on the housing waiting list, with lettings for just 2.5% of them in 2018-19. What hope can I give the other 97.5% that they will ever find a place to go? I would like to provide statistics on home ownership but, again, I will move on to some of the other data in my speech.

The statistics and the stories that I have detailed this afternoon should provide thoroughly fertile ground for the British house building industry to get on and build, but its record does not match the potential. Here is the reality: our country’s housing target is 300,000 new homes a year—a figure that has not been reached, as we have already identified, since 1969, when councils and housing associations were building new homes. England is now on course for the worst decade for house building since the second world war.

I would like to look specifically at the performance of the leading house building companies in our country. To the best of my understanding, the figures are all correct as of June. In the last financial year, just 86,685 homes were completed by the 10 FTSE 350 house building companies, despite an extraordinary collective pre-tax profit of more than £5.37 billion. That is a mind-boggling figure, which is better understood when broken down.

Let us start with the four FTSE 100 housing companies: Barratt, Persimmon, Taylor Wimpey and Berkeley. In the most recent financial year, Barratt completed just 17,579 homes—slightly more than Persimmon, which finished 16,449 homes, with profits of £1.1 billion, of which half was down to public subsidy through the Government’s Help to Buy scheme. Taylor Wimpey came third with 15,275 homes completed but, in fourth place, despite an astonishing pre-tax profit of £934.9 million, is Berkeley homes, which completed a pitiful 3,894 homes. Together, those four companies collected a pre-tax profit of an unimaginable £3.68 billion, despite completing just 53,198 homes—less than 18% of the Government’s house building target.

What went wrong? Did they perhaps just not have the land to build the houses? Those four companies are sitting on a land bank of more than 300,000 plots between them. If we add in the rest of the FTSE 350 house building companies—Bellway, Bovis, Countryside, Crest Nicholson, Galliford and Redrow—the collective land bank is a staggering 470,068 plots, yet they completed 86,685 homes between them.