In 2019, prior to the COVID-19 outbreak, they totalled £5.4 billion. However, they have since fallen to £2.7 billion in 2020 – a pandemic decline of -49%.
Sirius Property Finance analysed the pre-tax profits of the nation’s 12 largest housebuilders and found that in 2019, prior to the COVID-19 outbreak, they totalled £5.4 billion. However, they have since fallen to £2.7 billion in 2020 – a pandemic decline of -49%.
While these annual profit losses are significant, in some cases extraordinary, the limited insight available on 2021 profits reveals early signs of recovery for the vast majority of developers. Of those developers that have so far published profit reports for 2021, all but one have seen positive bounceback after a difficult 2020.
Despite these developers largely enjoying an uplift in profits between 2020 and 2021, no developer has yet managed to work their way back to pre-pandemic profits of 2019.
Managing Director of Sirius Property Finance, Nicholas Christofi, commented:
“While much of the property market enjoyed a pandemic-inspired boom, housebuilders and developers were not so lucky. Initial workplace restrictions caused construction sites to shut down for a period of time and, when allowed to reopen, COVID continued to cause problems both on site and across the global supply chain, sending the cost of materials skyward.
Furthermore, economic uncertainty meant that backers and investors were less inclined to pump money into major developments until the dust had truly settled.
All of this meant that in 2020, less projects were completed and those that were took much longer and cost a great deal more than planned. Hence the significant decline in annual profits more or less across the board.