Countrywide CWD Suffered badly in quarter four with figures showing the beginning of a slump in the housing market which is going to get worse in 2017. Countrywide is the largest agent in the business with national coverage and local reach, so these figures do not relate just to inner London or the Home Counties. They present a picture of what could be the end of the grossly overheated housing market all over the country. Results for the full year to 31st December are expected to show a 6% drop in transactions. Fourth quarter income declined to £179m. from 2015’s £196m It is expected that sales in 2017 will decline further, impacted by a continuation of lower volumes than in 2016.
Barratt Development BDEV does claims a healthy housing market with strong demand for new houses during its second half to the 31st December and that is all very true, provided you ignore London which is hardly realistic for a national housebuilder. Yesterdays update from Barratt’s showed that sales in London had plunged by over in 50% in the 6 months to 30th December, down from 842 to 367.As against that completions outside London were at their highest level for 9 years but the fall in London was so severe that total completions for the half year fell from 7,626 to 7,180.
The average selling price rose by 3.9% but for the poor private buyer the increase averaged 5.3%. Barrat claims that one of the main reasons for the strength of the market is continued government support, which does raise the oft asked question as to why the government should continue spending taxpayers money to fuel an already overheated market. Cynics may say that it is just the Tories looking after their own and ignoring basic economics.
Total forward sales are up by 15% and profit before tax for the six months is expected to rise by 7%, with a further 7% expected in the first half of 2017
Mitchells & Butler MAB enjoyed strong Xmas trading with what the CEO describes as an encouraging performance. Like for like sales over the 7 weeks to the 7th January rose by 2.9%, compared to a tiny 0.5% for the 8 weeks to the 19th November. Margins however are expected to be lower than in 2015 because of cost pressures