“Good management is the art of making problems so interesting and their solutions so constructive that everyone wants to get to work and deal with them” – Paul Hawken quotes
An Insight into the future of UK House-Building Industry
Britain’s house-builders are undoubtedly facing the worst recession in post-war history. This is the time of being more cautious of what is happening nationally and globally specifically US as UK’s post-recession conditions are very similar to each other and infact UK is running 12-18 behind US cycle. Before everything comes to a smooth, there would be many rough times for certain house-builders and some may be forced to shed off their workforces, some of their capital goods to survive in the industry. But the question here to think about is, to what will emerge of all this decisions? A good starting point? The whole new positive progression?
A good starting point is to recall what happened after the recession in the early nineties. My recollection is of two principal structural changes. First, land investment policy changed quite markedly, albeit in response to the introduction of the 1994 Town and Country Planning Act. This heralded the dawn of the strategic land bank, and land investment consumed much of the cash that had been raised to refinance the industry in 1993-95. Such a demand on cash is unlikely this time around, however, as land is a plentiful commodity on house-builders’ balance sheets at the moment.
Second, the recovery ultimately led to a significant round of consolidation after 1997, based primarily on the strong taking the weak, driven by the desire to acquire land banks. Again, it is quite difficult to see this happening this time. Why? Well there is less to consolidate for starters, land banks are long ...