Small builders call time on unsold properties

Non-existent sales and mounting debt are killing off Britain’s small builders who have been building much needed family homes in the country’s suburbs.

The lack of accessible mortgage finance holding back many buyers in today’s market has left a glut of small builders desperately seeking to offload whole sites, as they teeter on the brink of collapse, according to Property Portfolio Rescue (PPR), the property recovery specialists.

Over the last six months, PPR has recorded a 78% increase in enquiries from small to medium sized housebuilders, desperate to offload unsold properties in order to free up cash to repay bank loans and outstanding contractors.

In more buoyant times, amateur developers were buying up small sites, demolishing existing houses, redeveloping and selling on quickly. However, those with unfinished developments at the beginning of the slump are now looking to sell off entire sites to avoid bankruptcy. Smaller professional housebuilders, while not necessarily facing immediate collapse, are also keen to sell complete sites to release cash to buy further land, now available at rock bottom prices, to ensure their long term survival.

Nick Hopkinson, Director of Property Portfolio Rescue (PPR), comments:

“A combination of buyer reluctance and a lack of accessible mortgage products has left many housebuilders in serious financial difficulty, as consumers delay the purchase of their next home. While larger housebuilders may be in a stronger position to offer a full range of incentives to entice buyers back into the new homes market, it is the smaller housebuilders who have been hit hardest.

“We have seen a surge of enquiries from small housebuilders over recent months, desperate to offload homes quickly in order to secure their future survival. By selling a large chunk, or in some cases all the homes on a given site to us, housebuilders are able to free up cash flow quickly and move on, before they get into serious financial difficulty.”

Property Portfolio Rescue offers a lifeline to many small housebuilders struggling to shift existing stock. PPR will consider buying up all or a number of homes on any given site and will consider purchasing both completed properties and those that still require finishing off.