House builder blames ‘broken planning system’ and interest rates for loss
In independent house builder has blamed the “broken planning system” and high interest rates putting off first time buyers for it falling into the red.
Cheshire-based Eccleston Homes has reported a pre-tax loss of £1.2m for the 12 months to 31 October, 2024, down from the £2m profit it achieved in the prior year.
New accounts filed with Companies House also show its turnover decreased over the same period from £31.1m to £22.2m.
Eccleston Homes, which is owned by Kevin Marren and operates in the North West of England, legally completed 68 houses in the year, down from 87.
The business added that the drop in its gross profit from 22.9 per cent to 17.4 per cent was a “major factor in a disappointing result for the period”.
The house builder said prolonged high interest rates led to potential buyers making a conscious decision to hold off investing in a property until the Bank of England had reduced rates.
It added that “the broken planning system has been a major issue in recent years” and that while the government’s plans to improve it are “encouraging” it feels “this will take a few years to have a major impact”.
The results come on the same day the Bank of England is expected to cut interest rates to four per cent.
House builder hoping for further interest rates cuts
A statement signed off by the board said: “We have continued to experience difficult house buying market conditions during the year due to prolonged high interest rates.
“This has adversely affected sales for the year as many potential home buyers have made a conscious decision to wait until interest rates have reduced before committing to buying a property.”
The house builder added: “We are budgeting for an increase in legal completions in the current period and, on a positive note, we have a better forward sold position than this time last year with 54 per cent of our homes budgeted to legally complete forward sold.
“It is hoped that the continued falls in interstate and mortgage rates will help to sustain this momentum.”
Eccleston Homes also said: “The broken planning system has been a major issue in recent years.
“The new government’s intentions to improve the planning system and regulatory environment are encouraging but we feel this will take a few years to have a major impact.
“Inflationary pressures have eased but we still need to contend with increased costs due to rising building regulation changes relating to energy efficiency and the move away from gas boilers which are still working their way through the system.
“We remain uncertain as to when some of these regularity changes will be implemented.
“The frantic early days of the Trump administration are causing great uncertainty at a geopolitical and macro-economic level.
“If they actually push ahead with a sustained tariff trade war this may result in a slowing or reversal of the downward trend in interest rates.”