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Executive Summary

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EXECUTIVE SUMMARY

Key Note estimates that the housebuilding market in Great Britain was worth £8bn in 1997. The market showed annual growth between 1991 and 1994, dipped slightly in 1995 and 1996 and rose again in 1997. Total growth between 1991 and 1997 was 38 percent. In volume terms, the number of housing starts in Great Britain reached 188,800 in 1997, an increase of 9.1 percent on 1996.

The housebuilding market is segmented into two main sectors: private housing and public housing. The private sector is by far the largest, worth £6.71bn and accounting for 83.9 percent of output value in 1997, while the public sector was worth £1.29bn.

The market can be further segmented by house type. In 1997, detached houses accounted for 43 percent of dwelling starts, followed by semi-detached houses (19 percent), terraced houses (16 percent), flats/maisonettes (16 percent) and bungalows (6 percent). Since the early 1990s, consumers have demonstrated an increasing preference for greater detachment from neighbours, which has been accompanied by a rise in the number of three- and four-bedroom houses built over the same period.

The market performed well in 1997, with most major housebuilders reporting increased sales and profits, a rise in the numbers of houses sold and an increase in land bank stocks. Inflation has been held to within Government targets and house affordability is high. Moreover, the Government has estimated that 4.4 million new homes will be required by 2016.

However, against this background of optimism, there are factors on the horizon which could dampen the market in the short term. Rising interest rates during 1997 and 1998 have slowed the whole housing sector and the rate at which unemployment is decreasing has declined. In 1998, the number of housing transactions is falling and repossessions have started to rise. At the same time, housebuilders are experiencing difficulties in obtaining planning consent for future building projects.

Taking into account the effect of recent interest rate increases and housebuilders' reports that they intend to focus on profitability, rather than higher volume, Key Note forecasts that housing starts in the private sector will decline from 162,400 in 1997 to 159,000 in 1998, recovering to 160,000 by 2000. In the public sector, starts are forecast to fall from 26,400 in 1997 to 23,000 in 1998, rising to 29,000 by 2000, as new Government initiatives begin bring funds into the sector.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

TYPES OF PRODUCT

MARKET POSITION

MARKET TRENDS

Table 1: New Housebuilding and Total New Construction Output in Great Britain at Current Prices (£m), 1991-1997

Table 2: House and Flat Completions in England (000), 1991-1997

Table 3: Dwelling Completions in England by Type (number), 1991-1997

Table 4: Type of Dwelling Starts in Great Britain ( percent), 1991-1997

Table 5: Dwelling Completions in England by Region (number of completions), 1997

Market Size

INTRODUCTION

THE TOTAL MARKET

Table 6: Housing Output in Great Britain at Current and Constant 1990 Prices (£m), 1991-1997

Table 7: New Housebuilding Output in Great Britain (£m), 1991-1997

Table 8: Housing Orders in Great Britain at Current and Constant 1990 Prices (£m), 1991-1997

Table 9: New Housebuilding Orders in Great Britain at Current and Constant 1990 Prices (£m), 1991-1997

Table 10: Housing Starts and Completions in Great Britain (000), 1991-1997

Industry Background

INTRODUCTION

INDUSTRY STRUCTURE

EMPLOYMENT

TRADE ASSOCIATIONS

Table 11: New Housing Output and the Economy at Current Prices (£m and £bn), 1991-1997

Table 12: New Housing Output and Repair and Maintenance at Current Prices (£m), 1991-1997

Table 13: Number of General Builders in Great Britain by Number of Employees (number of firms), 1991-1996Å

Table 14: Number of Housebuilders in Great Britain (number of builders registered with NHBC), 1992-1997

Table 15: Number of General Builders in Great Britain and Value of Work Completed (number, £m and £000), 1996Å

Table 16: Permanent Dwellings Started and Completed in England by Government Office Region (number and percent), 1997

Table 17: Private Contractors in Great Britain by Region (number), 1996

Table 18: Employment in the Construction Industry (000), 1992-1996

Table 19: Average Weekly, Gross Full-Time Earnings (£), 1992-1997

Competitor Analysis

INTRODUCTION

THE MARKETPLACE

MARKET LEADERS

ADVERTISING AND PROMOTION

Table 20: Number of Housebuilders by Starts ( percent and number), 1990-1997

Table 21: Leading UK Housebuilders by Completions and Turnover (£m), 1997/1998

Table 22: Main Media Advertising Expenditure by Housebuilders (£000), Year Ending June 1997 and 1998

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

INTRODUCTION

MARKET BACKGROUND

THE BUYERS

SOURCES OF FINANCE

GEOGRAPHIC TRENDS

Table 23: UK Key Housing Market Indicators (000, £m and £000), 1991-1997

Table 24: Housing Affordability Indicators (index 1990=100), 1991-1997

Table 25: Age Distribution of Borrowers ( percent of mortgages for new houses), 1991-1996

Table 26: Sources of UK Mortgage Lending (000 of loans approved), 1992-1997

Table 27: Sources of Mortgage Lending for New Houses (000 of loans approved), 1991-1996

Table 28: Loans by Type of Dwelling ( percent of advances), 1991-1996

Table 29: All Lenders Advances by Region ( percent of dwellings mortgaged ), 1994-1996

Table 30: Regional Average New House Prices (£000), 1991-1996

Outside Suppliers to the Industry

INTRODUCTION

MATERIAL SUPPLIES

LAND SALES

Table 31: Deliveries of Basic Building Materials (000 tonnes, 000m3 million, and 000m2, 1991-1996

Table 32: Land Prices and Index of Land Prices for Private Sector Housing in England and Wales (£000 per hectare and index 1985=100), 1990-1996

Current Issues

GENERAL ECONOMIC CONDITIONS

INFLATION AND INTEREST RATES

PLANNING CONSENT

URBAN HOUSING

COUNCIL HOUSE REFURBISHMENT

Forecasts

ECONOMIC OUTLOOK

FACTORS AFFECTING GROWTH

FORECASTS 1998 TO 2000

LONGER TERM INFLUENCES

Table 33: Key Economic Variables ( percent change year-on-year), 1994-2000

Table 34: Forecast Private Housebuilding ( percent change year-on-year and 000), 1998-2000

Table 35: Forecast Public Housebuilding Starts and Completions (000), 1998-2000

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1998 Key Note

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