Heating at the Dorchester Hotel was turned up full blast this morning and extra cups of coffee were on standby as delegates at the Movers and Shakers breakfast ducked in from the bitter cold for a 7am start. The general consensus at the event was that the freezing weather was a bit of a shock to the system.
Quite fitting really considering that the event took place on the morning after the night before following the CSR yesterday 鈥� another shock, though not an altogether unexpected one, to the system.
Despite the fact that the industry was braced for bad news, deep cuts and some serious belt tightening, Osborne鈥檚 spending review was worse than plenty of people feared 鈥� particularly in housing. And so the today鈥檚 breakfast panel discussion on 鈥減iecing together the puzzle of the UK residential market鈥� was about as cold as the weather, with not much good news to be seen on the horizon. Certainly not immediately in any case.
Speakers Tony Pidgley, Gerald Ronson and Sir Bob Kerslake all warned that times ahead looked tough 鈥� probably for the next three years at least, if not five in the residential sector: 鈥淲e are going to see a difficult period,鈥� said Pidgely. 鈥淧eople have lost the 鈥榝eel good factor鈥� and after yesterday, why would anyone want to go out and buy a house?鈥� He added that the government 鈥渄oesn鈥檛 appear to have any sympathy for housebuilding.鈥�
Ronson added that we are now in 鈥渦ncharted waters鈥� following the severity of the CSR but said that the government had been left with no choice. 鈥淭here is not a lot of good news,鈥� he said. 鈥淭here will be very little joy for 3-5 years. We need to adopt a different work ethic as there will be lots of changes in society. Some will be very unpleasant and unpalatable. But we鈥檙e just going to have to get through it.鈥�
Sir Bob Kerslake, chief executive of the HCA finished off by saying: 鈥淚 would like to cheer everyone up. But we are entering a new reality here. There is much less public funding. People need to be prepared to adapt to change.鈥�
Pidgely revealed that Berkeley, which became the first developer to build homes for rent under the Homes and Communities (HCA) private rental initiative in the summer, is set to launch a second private rental fund to build just under 400 homes in the next year in response to the drastically different market housebuilders are facing now and over the coming years and to drive construction through such tough times.
Ronson said that if the system became viable for a company like Heron International, which isn鈥檛 a pure housebuilder he too would consider building homes for rent.
Despite such somber predictions and a harsh outlook for the industry, the panel and delegates remained in encouragingly high spirits this morning, the panelists in particular taking the opportunity to direct jokes and jibes at each other.
On being asked to kick off the discussion first, Pidgely said: 鈥淚鈥檒l have to go first as obviously Gerald given the biggest bribe. As usual,鈥� before later jokingly accusing Ronson of 鈥渨affling鈥�.鈥�
Later when Ronson described himself and Pidgley as being old for the industry Pidgley told him to speak for himself. Ronson shot back: 鈥淚 have been in this business for some 52 years which makes me a bit of a dinosaur. One that still has teeth, though.鈥�
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