Fewer homes built than a decade ago

BRITAIN’S leading developers are still building fewer homes than they were before the financial crisis.

This is despite the fact that the big three – Barratt, Persimmon and Taylor Wimpey – have been handed millions from the taxpayer through the Help to Buy scheme.

Developers claim the programme is crucial in the effort to tackle the chronic housing shortage.

But critics argue it’s simply pushed up prices and inflated builders’ profits and bonuses while doing little to help struggling first-time buyers.

Persimmon – whose boss Jeff Fairburn was dubbed ‘Mr £131million’ over the potential size of his bonus – built 16,043 homes last year and another 8,072 in the first six months of 2018.

Analysts at AJ Bell said that put it on course to build 16,685 homes this year, with profits heading towards £1billion. That’s up from a low of 8,976 in 2009 – but still below the 16,701 it built in 2006.

Despite building fewer homes than it used to, Mr Fairburn was paid £47.1million last year as he was handed the first tranche of his bonus. Profits at the company jumped from £225million in 2012, the year before Help to Buy began, to £977million last year.

Barratt built 17,579 homes in the year to July, banking record profits of £835.5million along the way.

That’s up from 11,171 in 2011 but stil below the 18,588 homes built in 2008.

In the five years since the start of Help to Buy in 2013, Barratt has paid its chief executives a total of £24.6million. Taylor Wimpey built 14,862 homes in 2006 but only built 14,541 last year.

Profits at the company jumped from £185million in 2012 to £812million last year.

Sam Dumitriu, head of research at the Adam Smith Institute think tank, said: ‘Help to Buy creates more demand for housing, which pushes prices up, without increasing supply.

‘Simply adding more fuel to the fire, and more demand to the system, only makes Britain’s housing problem worse.’

Help to Buy allows house hunters to purchase newbuilds worth up to £600,000 using deposits of 5 per cent. The Government then loans up to 20 per cent – or 40 per cent in London – interest-free for five years.

Paul Higgins, of the Homeowners Alliance, said: ‘Help to Buy has been great for developers, but clearly these figures show it’s not improving supply.’

A Barratt spokesman said: ‘ We are proud to have increased the number of homes we build by 40 per cent since 2012.

‘We set out ambitious volume targets for the medium term which take us up to 20,000 annual completions, more than at any time in our 60 year history.’

Persimmon and Taylor Wimpey declined to comment.