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Time for a shake up in housebuilding?

Did you hear about the 5,000 new homes to be built by John Laing and Balfour Beatty? By Chris Ashworth

Not your usual housebuilders and for that matter not in this country. Within days of each other John Laing announced they had won a contract in Holland and Balfour Beatty in the US.

Both working for those countries’ military. No doubt, PFI experience was a major factor in winning the work and many months of negotiation. But it is interesting that a contractor like Balfour Beatty who does not build accommodation in the UK is doing so overseas when UK housebuilders are desperate for work.

It also highlights missed opportunities for UK housebuilders. While Taylor Wimpey are being pressured into selling their North American division, there is Balfour Beatty winning work in an area that must be Taylor Wimpey’s core skill.

We also hear about the need to improve the military accommodation in this country. Surely this would be an ideal time for the Ministry of Defence to negotiate some deals with British housebuilders?

We have been told that with the fall away in demand for housing, the UK industry is losing its capacity and we will not be able to ramp up production when demand returns. But presumably, if the price is right, Balfour Beatty would be happy to work on these projects in the UK. Especially if it is some form of PFI project to provide social housing.

In the past there has also been talk of companies such as Ikea, Tesco and Land Securities entering the housing market. With 25 per cent of private housing development currently controlled by three companies perhaps it is time for a restructuring of the market. And now would be the perfect time for new companies with financial resource to enter the market.

Over the past two decades housebuilders have focused on their core activity. This seems to have let them down, various reports have shown they still have plenty of room for improvement in the way they build homes and with the market collapse they have demonstrated their high level of dependency on just one market. A lesson John Laing has learned and an example we could all follow.

And if you are one of the unfortunate ones to have been made redundant by a housebuilder, how do you fancy working in Holland?

Chris Ashworth, founder of Competitive Advantage Consultancy, provides market research and training services to the construction industry. He is a CIMCIG committee member, for further details visit www.cimcig.org

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