Delivering sustainable growth and superior returns from our balanced business model through the cycle with a commitment to quality and integrity.

Market trends

The UK housing market continues to have high latent demand 

The minimum number of new homes required each year to maintain the balance of supply and demand is now estimated to be in excess of 250,000. The last year in which this was achieved was 1979–80. While the supply of new housing continues to grow steadily, latent demand is far from satisfied with net additions to the housing stock lagging significantly behind the totals required. The findings of the Letwin Review in October 2018 focus on speeding up delivery on large strategic sites, aligning well with our mixed-tenure model.

Our response
We operate across the UK in areas of strong housing demand and have grown our total annual completions every year since 2012, from 1,903 then to 4,295 in 2018. Our business has the human and financial resources to continue this growth in the medium term, both in our existing areas of strength and newer geographies such as the East Midlands and Yorkshire. Our commitment to mixed-tenure development and automation drive rapid growth, and we continue to see significant growth opportunities in both our operating divisions.

Our mixed-tenure approach helps us deliver much needed homes more quickly

In recent decades, the structural undersupply of housing in England has been partly caused by a lack of new affordable housing. There has been no equivalent of the large-scale local authority housing estates last built in the 1970s, and the provision of social housing within private developments under Section 106 agreements has not kept up with demand. Little purpose-built Private Rental Sector (“PRS”) housing has been constructed in recent years. While there is increased appetite from institutional investors, there remains a structural undersupply of good-quality homes for market rent in most urban areas.

Our response
It is a key part of our strategic approach that we take a mixed-tenure approach on all our developments. We remain the UK’s only major housebuilder for whom private for sale homes comprised less than half (46 per cent) of total completions. In 2018, we built 35 per cent affordable and 19 per cent PRS homes. Our Partnerships division provides a balanced mix of all three tenure types, enabling rapid growth as well as business resilience.

Government policy remains supportive of housebuilding and mixed-tenure delivery

It is Government policy to encourage additional housing via initiatives like the Help to Buy programme and National Planning Policy Framework. New schemes announced this year include £100m to back the Mayor of the West Midlands’ plan to deliver 215,000 homes and confirmation of a £1.67bn funding package for London to build affordable homes. The Letwin Review on overcoming obstacles to building concluded that build-out rates could be accelerated if housebuilders offered a greater variety of homes in more distinct settings. An independent review of building regulations and fire safety, commissioned following the Grenfell Tower tragedy, was published in May 2018.

Our response
We remain ideally placed to benefit from the Government’s commitment to deliver new homes of all tenure types. In 2018, 89 per cent of our private homes were eligible for the Help to Buy scheme, which was used on 29 per cent of our total completions across the Group. We deliver a greater proportion of affordable housing in London than any other major housebuilder. We also have an industry-leading owned or controlled land bank within 50 miles of London, 85 per cent of which has been strategically sourced. We welcome the Letwin and the post-Grenfell reviews, which we believe will make a sensible contribution to the regulatory environment.

Tight labour supply across the UK means we are focused on staff retention

Factors including chronic underinvestment over the last quarter century, the impact of the 2008 financial crisis and the uncertainties created by the Brexit vote and subsequent negotiations have led to a shortage of skilled and experienced labour at all levels of the housebuilding industry.

Our response
We have continued to lobby the Government alongside the Home Builders Federation to protect the status of EU construction workers as a vital part of the UK economy. We are also recruiting significant numbers of apprentices and trainees, alongside expanding our graduate recruitment programme, to protect our business against labour-supply risks. As well as acting to attract, develop and retain the best talent, we are automating production of timber frame panels in our Partnerships division to secure our supply chain and enable skilled workers to focus on value-adding processes.

Our new modular build capability will give us more control over quality and speed delivery

The industry needs to look at different building methodologies if it is to deliver the growth in output required to meet increased demand in the face of labour shortages. Although the industry still has yet fully to embrace non-traditional build, several methods of off-site construction are emerging, from timber frame construction to complete modular build. The case for off-site construction continues to grow, driven by benefits including build speed, enhanced quality assurance, reduced waste onsite and the opportunity to do more with the existing workforce.

Our response
We believe that off-site construction is integral to meeting our growth plans and securing our supply chain for the future. We already use off-site timber frame construction on 49 per cent of our output, now including that of the Westframe facility we purchased as part of the Westleigh acquisition. During 2018 and 2019, we are investing £6m in a new factory where an automated production line will include all windows, first-fix plumbing and electrical channels, insulation and plasterboard in a closed-panel system. With production starting in 2019, this will deliver around 1,500 homes a year.

Mixed-tenure model driving strong risk-adjusted returns

Our key resources

balanced business model


Low-risk model with high return on capital employed

Our Partnerships division applies our master planning and design capabilities in an urban environment on predominantly public sector land. Developments are delivered through development agreements generically referred to as ‘partnerships’ with local authorities and housing associations. 


Investment in growth and margin potential

In Housebuilding we develop homes using our well established master planning skills, often on strategically sourced land. For larger developments, we may seek a joint venture partner to complement our skills and share the risk.

Significant land bank in place
  • 19,778 plots owned or controlled in South East England
  • Greater scale driving improved operating margins
  • 85 per cent of the land bank has been strategically sourced
Established platform for growth
  • Selling from 27 sales outlets at 30 September 2018
  • Further 14 sites under construction
  • 1,334 additional plots secured in 2018
Regional infrastructure in place for growth
  • Improved efficiency from operational scale
  • Highly experienced management team

Our strategy for creating places people love

Delivering sustainable growth and superior returns from our balanced business model through the cycle with a commitment to quality and integrity.

Latest reports

Find out how we are delivering on our strategic priorities in more detail by
downloading the 2018 Annual Report.




Find out more…