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Monday 25 June 2018

McCarthy & Stone profits slump as it warns Government over ageing population

The group said the Government is in danger of ignoring the housing needs of older people if it fails to widen its focus beyond first-time buyers.

A McCarthy and Stone development (PA)
A McCarthy and Stone development (PA)

By Ben Woods, Press Association Chief City Correspondent

McCarthy & Stone has warned that Britain is “woefully unprepared” for the demands of its rapidly-ageing population, as profits halved following tepid demand for second-hand homes.

The group said the Government is in danger of ignoring the housing needs of older people if it fails to widen its focus beyond first-time buyers and deliver policy which supports the construction of retirement housing.

Its clarion call came as profits took a battering from a cocktail of pressures, including the sluggish second-hand market, escalating building costs, lower completions and a need to bolster marketing spend to help lift sales.

It also suffered from a pause in “build-start activity” in the wake of the Brexit vote in June 2016.

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Bid for McCarthy and Stone

Pre-tax profits plummeted 52% to £10.5 million for the half-year ending February 28, while revenues eked out 1% growth at £239.6 million over the period.

Chief executive Clive Fenton said trading was “resilient”, but he urged politicians to use a review of planning and social care legislation to rebalance housing policy towards helping older people.

He said: “The growing need for retirement housing caused by our rapidly ageing population also means the long-term prospects for our business continue to be positive.

Government must not ignore the many benefits of building more retirement housing McCarthy & Stone CEO Clive Fenton

“However, the UK remains woefully unprepared for these demographic changes and we are calling for a joined-up policy approach across all Government departments to encourage the delivery of better housing options for older people.

“We recognise the need to support first-time buyers but Government must not ignore the many benefits of building more retirement housing.

“This form of housing frees up existing homes for families and young people, and reduces pressure on social care services, which are set to account for half of all taxes raised by local authorities by 2035.”

The firm saw its average selling price climb 15% to £298,000 for the half-year, but was knocked by 12% fall in completions at 760 units.

While trading is on track to meet full-year targets, the company said it was now expecting a “more modest growth trajectory” over the next two financial years in response to lower land exchanges and planning consents.

Investors left the group licking its wounds again on Wednesday, sending shares down 3% in morning trading on the London Stock Exchange.

Its stock price took a hefty blow last year – dropping 8% on December 21 – after warning over a potential hit from a Government crackdown on unnecessary leaseholds and ground rent charges.

Press Association

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