Recession-battered builders scale back flatted developments in favour of traditional housing
Barratt chief executive Mark Clare has signalled a return to traditional house building, saying tower blocks will soon be a thing of the past.
Barratt has resubmitted a number of planning applications for flatted developments over recent months to build houses instead.
The recession has made house builders rethink the tactics that have seen flats make up more than half the industry’s output over the past decade.
Barratt’s portfolio in recent years has averaged more than 50 per cent flats, but Mr Clare said that would now drop below 30 per cent.
He said: “As a result of expected re-plans and product substitution, the output profile from our sites will change towards more family homes.
“If we exclude Central London, which is all apartments, our house-to-flats ratio will move to around two-thirds houses and one-third flats.
“If you look solely at new production, excluding products currently being built over the next 12 months, the percentage of apartments will drop below 30 per cent.”
National Housebuilding Council statistics show 50 per cent of the homes built in the UK in 2008 were flats. But in the first three months of 2009 that figure dropped to 42 per cent.
Britain’s biggest housebuilder Taylor Wimpey said 40 per cent of its output in 2007 was apartments. But that figure has reduced to just 26 per cent currently with the firm saying it is actively “reducing its exposure to this more challenging product”.
The trend has been welcomed by brick firms and roofing contractors who have seen falling workloads as the industry has concentrated on flats in recent years.
The Brick Development Association said an average flat used 3,000 bricks whereas a two-bedroom house required an average of 8,000.
BDA chief executive Michael Driver said: “For some time now we have watched the changing balance of housing in favour of flats with some trepidation and we would welcome a reversal.”
Panmure Gordon analyst Rachael Waring said the Government’s own planning policy had fuelled flat building in the UK.
She said: “The Government has wanted housebuilders to build flats over the past 10 years as they saw it as a better use of land.
“Housebuilders have had their hands tied. They have had had no choice but to include flats in their development plans or they would never have won planning approval.”
Developments made up predominantly of houses will allow builders to feed the market in a much more controlled manner while demand is still low due to the recession.
Housebuilders will be able to build houses as the market requires rather than building a whole block of flats that could potentially lie empty.
Ms Waring added: “Clearly we have had overbuild of flats in city centres. But the traditional family house is on the rise again. British families do not live in flats and have never wanted to.
“A lot of housebuilders are going back to planning authorities.”
The housebuilding sector has been one of the hardest hit in the construction industry by the current recession.
National Housebuilding Council figures show the number of homes built last year in the UK dropped to 106,593 from 200,309 in 2007 and 178,487 the year before that.
And the NHBC predicts the number built is expected to drop even further this year falling to below the 80,000 mark.
Analysis: Builders need the ability to respond to demand
By John Slaughter
The regeneration agenda, planning policy - including density requirements - and investment interest have all contributed in recent years to an increase in the proportion of flats and apartments built compared to other types of home.
While the type of housing being developed at any point in time is influenced by market fluctuations, if we are to avoid the social problems and price booms caused by housing shortages, we need to be delivering significantly more of all types of housing over time.
The latest household projection figures released by the Government show us that even if we as an industry met the challenging target of three million new homes by 2020, it may still not be enough for what the country needs in the future.
One of the challenges for the recovery is therefore to create a planning and policy framework that will allow enough desperately needed homes of all kinds to be built.
This involves producing a planning system that delivers enough – and overall more - land, quickly enough and in the right places where people want to live.
It also means being realistic about what builders can be expected to contribute by way of planning obligations.
Builders are able to change development mix where necessary to meet local demand. But if we continue to increase the items on central and local Government’s wish list for developer contributions – be it zero carbon housing, contributions for local infrastructure or affordable housing – then development of any type will struggle to be viable, and the future implications are clear.
John Slaughter is director of external affairs for the Home Builders Federation