HBF says housebuilder trading not impacted by coronavirus

A spokesperson for the body, which represents the UK’s biggest housebuilders, said its members have seen “absolutely no impact whatsoever” on trading due to the coronavirus outbreak.

Steve Turner, director of communications for the Home Builders’ Federation, said housebuilders stood ready to follow government advice to mitigate the spread of the disease, but that “from a sales perspective it is absolutely business as usual”.

His comments came after shares in listed housebuilders yesterday suffered falls of more than 10% on growing fears over the economic impact of Covid-19. A number of housebuilders, including the UK’s largest, Barratt, have lost between 20% and 25% of their value since the end of last week.

Yesterday, listed builder Berkeley Group postponed a £455m shareholder payout as a precautionary measure, blaming market uncertainty due to coronavirus, but said trading had so far been unaffected.

Estate agents surveyed by the RICS also voiced fears that people’s reaction to the disease could end the recent resurgence in the housing market seen since the December election.

The HBF’s Turner said: “So far, site work continues. Visitor levels have seen absolutely no impact whatsoever.

“Business will see what the government advice is and act accordingly, and we will see what any future repercussions are. However, if you compare the situation to 2008, builders are in a much stronger financial position to weather any issues.”

In 2008, many builders had borrowed heavily to buy land or other businesses, leaving them near collapse when the global financial crisis hit, and at the mercy of their lenders. However, most listed housebuilders are currently not indebted.

The HBF collects weekly data from its members on trading conditions, which it keeps closely guarded, which should leave it in a position to make a quick and accurate assessment of the impact of any economic shocks to the sector.

The HBF view was backed by Alastair Stewart, construction analyst at Progressive Research, who said the housebuilders he had talked to “had not seen any decrease in new enquiries” due to the deepening concerns over the virus. “So far – albeit counterintuitively – it seems that firms are unaffected.”

However, other businesses have reported worsening conditions. Edward Heaton, founder of buying agent, Heaton & Partners, said two of its international clients had already cancelled their plans to come to the UK because of coronavirus, and that some sellers were choosing to delay marketing homes as they think people will not be venturing outside.

He said: “Whatever anyone says, there has been an immediate impact on the property market. Selling agents are reporting that after an exceptionally busy January and February, the market has not really picked up since the half term break.”

Yolande Barnes, chair of the Bartlett Real Estate Institute, said the outbreak was likely to have a “wide business impact” on residential developers. “This will take people’s eyes off the ball regarding purchases of new homes. The industry will be very lucky if it escapes a widespread cessation of homebuying – of course it will be very dependent upon how far and how fast the outbreak goes.”