It would have been difficult not to notice that 2015 was a good year for housebuilders. A positive mortgage environment, increasing government focus on new build and consistent customer demand across all regions meant Barratt Developments was able to sharply increase production.
In the last financial year, 2014/15, we increased the number of homes we built by over 10%, building 16,477 homes – the highest level for seven years.
We expect to build on our progress in 2016 with new site openings, more investment in great quality land and the continuation of industry leading graduate and apprentice schemes.
What’s been particularly pleasing for me in 2015 has been the blossoming of relationships between lenders and housebuilders. We have seen many lenders improve their new-build proposition, new lenders come to the market and some re–enter the sector in a serious way for the first time in some years.
For 2016 it would be good to put those improved relationships to the best use. Although we don’t yet know how the Starter Homes Initiative will work in detail, they are a big part of the future. So we need to work together to deliver great solutions for our mutual customers.
It would also be good to see as many lenders as possible support the new Help to Buy London shared equity scheme which offers a 40% equity loan where affordability is most difficult and it is needed most.
And finally, there is an increasingly strong case, as affordability becomes more stretched, particularly for younger first-time buyers, to build more quality apartments in appropriate locations to cater for this market.
Last year only 14% of Barratt’s total production was flats outside of London so it would be great in 2016 to use our improved relationships to look again at how this market can be expanded. That means the housebuilding industry will need to offer lenders the transparency and quality of product needed to reassess the real risk of lending to customers buying a new flat in a post-MMR world.
My hope for next year is that 2016 will be the year of loan-to-value parity for the new-build market.