Housebuilders Make Money
This week saw three of the biggest housebuilders in the UK deliver increases in the number of homes they built and the profits they made. Bovis sold 3,759 homes; Taylor Wimpey 15,275 homes and Persimmon 16,449 homes generating profits before taxation of £168m, £857m and £1,091m respectively.
The scale of these profits added fuel to the fire of the Help to Buy debate: Does it lead to more homes being built or is it a Government subsidy propping up housebuilders’ profits. The simple answer, in my view, is that yes it leads to more homes being built (the policy objective of the UK Government) and if a housebuilder sells more homes it should generate more profit. But I don’t think it is a subsidy propping up profits – that is probably a post for another day.
Estate Agents Lose Money
The main debate in the UK estate agency market over the last three years has been the ‘bricks vs clicks’ debate or online estate agents vs traditional high street agents. Many believed that online estate agents would hurt high street estate agents as much as Amazon has hamstrung high street retailers.
This week Foxtons, the London based high street estate agent, announced a loss before taxation of £17.2m which is ironic really when many believe the prices of the products they sell (houses) are priced too highly. Could this be because of the Amazonification of UK estate agency?