Abstracts » Business

Housebuilders on the edge

Article Abstract:

The United Kingdom house building industry has not performed as well in terms of its stock prices as stock prices as a whole since 1988, and stock prices of house builders have dropped in 1998. The sector is affected by a rise in the cost of land during good years, and a drop in prices in bad years. Volumes have become important for housebuilders' profits, but volumes cannot easily be increased. There will be additional costs due to a new government policy of using brownfield sites needing cleaning, and permission to build on greenfield sites may be less easy to obtain.

Real Estate, Real Estate and Rental and Leasing, Real estate industry

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Housebuilders

Article Abstract:

United Kingdom construction companies specialising in residential buildings tend to be affected by rises in interest rates, with growth slowing after rates reach more than 8%. Housebuilders have performed well in 1998, but their earnings are forecast to drop in 1999. UK interest rates have risen, and house prices have dropped in London, England. Land banks have a major impact on the performance of house builders. The government aims to make more use of brownfield sites, and this can increase costs for builders.

Industry Overview

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