Prompted by the difficulties of pointing students towards literature on the housing development sector and process, I’ve been thinking of doing some work on the volume house builders. Of course there’s been a lot of government interest and work on the housing supply question from lots of perspectives – land supply, skills, planning etc. However, there’s been limited sector analysis. My colleague at Reading, Michael Ball has probably done the most work in this area in his work in 2010 for the DCLG. It may be getting dated but it’s a great starting place for anyone trying to understand the production process for new housing. Sarah Payne at the University of Sheffield has done some more recent research on the issues faced by the housebuilding sector in terms of their perceptions of what’s stopping them building more houses more quickly. Even more recently, there’s been a report by the wordily and worthily titled All Party Parliamentary Group for Excellence in the Built Environment that, among other things, takes a critical looks at the quality of the product produced by the house building sector. Amongst lots of other issues, it finds an interesting positive correlation between the number of houses constructed and the number of complaints suggesting skills bottlenecks when supply rises. The consumer focussed Brand New Home’s website is passionate about the quality of new homes being produced by the sector and provides a lot of good information and insights into the nature of the development process. Its New Homes blog has some excoriating analysis and comment. Persimmon emerged particularly badly from it. All good stuff.
Currently, I’d like to know more about the house building sector as an asset class. How does its performance compare to commercial developers? Is its performance highly correlated with any other sectors? Is its performance closely linked to real estate services firms such as Rightmove? How much of their enterprise value lies in the house building business relative to their land investment business? I suspect a lot of this type of analysis is being done by City analysts. I’d certainly like to know more.