Builders make £7bn of profit in pandemic

BRITAIn’S biggest housebuilders have raked in more than £7bn of profits in two years as the pandemic boosted property demand.

Buyers, encouraged by a stamp duty holiday and record low interest rates, stormed into the market in search of more spacious homes.

This so-called ‘race for space’ boosted profits at a string of developers from Barratt Developments and Taylor Wimpey to Redrow and Bellway.

Analysis by the Mail shows eight housebuilders in the FTSe 100 and 250 are on course to have made more than £7bn in profits across 2020 and 2021 – according to reported pre-tax profit figures and forecasts by analysts.

The property market froze when the pandemic struck in early 2020 but roared back as restrictions eased and a stamp duty holiday was granted. Last week nationwide said house prices rose by more than 10pc in 2021 – the biggest annual increase since 2006.

The price of an average property now stands at a record £254,822 – up 16pc since the start of the pandemic.

Persimmon, the biggest housebuilder listed on the London Stock exchange, is expected to amass a profit of more than £1.76bn over the two-year period.

Barratt Developments is forecast to achieve nearly £1.3bn, while London-focused developer Berkeley is predicted to make just over £1bn and Taylor Wimpey £994m.

Bumper profits are also expected among the mid-cap builders, with newcastlebased Bellway in line for nearly £865m, Welsh company Redrow £577m and Vistry Group, formerly Bovis Homes, £432m over the two-year period.

The weakest of the bunch is Surrey-based Crest nicholson, which is only expected to report £116.1m in profits.

However, Covid has not helped share prices in the sector, with most builders struggling to recover pre-pandemic levels.

There are signs that the boom time could be coming to an end. Property transactions fell 52pc month-on-month in October, shortly after the end of the stamp duty holiday.

While the figure rebounded by 24.3pc in november, it was still 16.4pc lower than at the same time in 2020.

The cooling could also be accelerated by last month’s interest rate rise, which will push up the costs of mortgages.