From James Lockett ProperPR

Sirius Property Finance has revealed how the pandemic halved the profits taken by the nation’s biggest housebuilders and while positive signs have been seen since, the industry is yet to completely recover. 

The research shows that: - 

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Housebuilder profits drop by half during pandemic

Research by real estate debt advisory specialists, Sirius Property Finance, has revealed how the pandemic halved the profits taken by the nation’s biggest housebuilders and while positive signs have been seen since, the industry is yet to completely recover. 

Sirius Property Finance analysed the pre-tax profits of the nation’s 12 largest housebuilders and found that in 2019, prior to the COVID-19 outbreak, they totalled £5.4 billion. However, they have since fallen to £2.7 billion in 2020 - a pandemic decline of -49%.

The worst-hit developer has been Keepmoat whose profits declined by -152% between 2019 and 2020, but it was a difficult time also for Countryside (-77%), Redrow (--66%), Taylor Wimpey (-64%), Bellway (-64%), and Crest Nicholson (-62%). 

While these annual profit losses are significant, in some cases extraordinary, the limited insight available on 2021 profits reveals early signs of recovery for the vast majority of developers. Of those developers that have so far published profit reports for 2021, all but one have seen positive bounceback after a difficult 2020. 

The strongest post-pandemic rebound comes from Redrow whose pre-tax profits increased by 124% from 2020 to 2021. Bellway’s profits increased by 102%, Barratt’s increased by 65%, and Berkeley’s profits rose by 3%. But the Galliford Try Group, whose pandemic profits in 2020 saw an astonishing 247% increase, experienced a significant post-pandemic drop of -119%. 

Despite these developers largely enjoying an uplift in profits between 2020 and 2021, no developer has yet managed to work their way back to pre-pandemic profits of 2019.

Berkeley remains -33% down on pre-pandemic profits, Bellway is -28% down, Redrow remains -23% behind 2019 profits, and Barratt remains -11% behind. 

NOTES:

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