News that some housebuilders are preparing to go back to work has given the industry a lift. Housebuilders dominated the top 10 risers in the FTSE 100 this morning, following news that Taylor Wimpey and Vistry are planning to reopen sites.
Taylor Wimpey’s shares rose 11%, while Vistry was up more than 10%. Both housebuilders have announced a phased return to construction, with Taylor Wimpey stating that building will recommence from May and Vistry reopening sites from Monday. Brick maker Ibstock has also announced that it will begin to bring its workers back from Monday.
The news boosted the housebuilders’ peers, with Redrow, Barratt and Bellway rising nearly 10%, Crest Nicholson climbing 8%, Persimmon more than 7% and Berkeley more than 3%.
James Tucker, CEO at mortgage technology provider Twenty7Tec, said: “It’s good news that some of the housebuilders are beginning to open sites again. The knock on effects further down the supply chain will be reduced as the pool of new build houses begins to increase again.
“New builds are capable of being valued from desktop, and of course are vacant possession, so we’ve seen that part of the market fare better than some others over recent weeks.
“Hopefully, we can begin to manage a safe return across the whole range of the market from housebuilders to estate agents, and mortgage providers to removals companies.”
This morning, Vistry Group announced that it will recommence work on c.90% of its partnership sites and a significant number of its housing sites from 27th April 2020. “The high level of contracted forward sales within this business provides certainty of the cash realisation from these sites,” the housebuilder said in a statement.
“We have been in close dialogue with our supply chain partners who are supportive of our plans,” it continued. “Our sales teams remain in close communication with existing and prospective customers remotely, with the business open to taking virtual tours, new reservations, progressing exchanges and handing over completed homes.”
Since the lock down commenced four weeks ago, Vistry has taken 212 gross private reservations, resulting in 132 reservations net of cancellations. In addition, it has exchanged on 170 homes and legally completed a total of 193 private sales. “Our levels of website traffic and prospects remain strong, an indication of the continued underlying demand,” it said.
Vistry will initial focus on homes which are watertight, with a clear visibility of completion and hence cash realisation. “Activity levels will commence in a measured way, increasing steadily, and maintaining a tight control on work in progress,” it said.
Vistry has furloughed the majority of its staff while its sites have been closed, however it expects more staff to return to work as activity on sites increases. Furloughed employees are receiving 100% of their regular pay until at least the end of May 2020.
“These staff have been encouraged to support the broader community and many are involved in a wide range of initiatives including sourcing and transporting PPE and other equipment to the front line, joining the NHS National Army and working as on-call firefighters,” it said. The housebuilder is also using the time to upgrade its IT.
Greg Fitzgerald, Chief Executive said, “I would like to thank all our colleagues and subcontractors for their remarkable resilience and commitment during these times and am pleased to announce that we will be recommencing activity levels across the majority of our developments on Monday 27th.
“Health and safety remains our top priority and a huge amount or work has gone into making sure our people can return to work with confidence in safe and well-planned operating procedures. This first step represents a positive move for the Group, as well as the wider economy, and the critically important delivery of new homes.”
