There has been a lot of activity recently with some of the big players merging or being acquired. Does this bode well for the UK new home buyer?
[UKPRwire, Sat Apr 21 2007] It was recently announced that there is to be an all-share “merger of equals” between Taylor Woodrow and George Wimpey to create Britain’s biggest house builder and propel the new company into the FTSE 100 index. This deal is set to put the £2bn take-over of Wilson Bowden (David Wilson Homes) by Barratt Developments in the shade.
The merger of the 3rd and 4th biggest house builders is expected to create millions of pounds in cost savings and boost it’s landbank. Wimpey, who recently lost out on the Wilson Bowden ‘auction’, posted profits last year of £370.9 million on a turnover of £3.15 billion and built 13,616 homes last year. Taylor Woodrow, announced profits of £406 million (down £5 million on last year) despite a rise in sales to £3.68 billion. They trade under the Bryant name. building a total of 13,165 new homes in 2006.
Over the years Taylor Woodrow acquired Bryant Homes, Wimpey having acquired Laing Homes amongst others. Persimmon bought out Beazer homes and more recently Westbury Homes who had themselves took over Prowting homes! Barratt Are to buy David Wilson Homes and Crest are frequently the talk of take-over speculation and Linden are in talks with Galliford Try.
Over the last 10 years, 22 building companies have been lost to mergers and acquisitions.
But is all this activity good for the new home buyer? It could be argued that the new leaner operations would create economies of scale, enabling homes to be built and presumably sold for less. However, it is more likely that the larger company’s profits will increase year on year as the standard and level of choice available to potential customers becomes less.
Those employees fortunate enough to have kept their jobs will be left wondering what may happen in the future. Could the new company be taken over? The result may be a lack of commitment to their work and an indifference to their employer’s customers – you and me!
More and more homes could be built on large developments, super estates that have gained planning after many years of negotiations. There may eventually be so little to choose from between the national house builders that those looking for a new home will be beating a path to the smaller developer’s show homes for that personal touch so often missing in recent times.
Whether it is good or bad news for the new home buyer, www.brand-newhomes.co.uk the new homes information website will guide you through the process and help you get the new homes that most closely meets your needs.
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