Jon Di-Stefano said the UK’s departure from the EU was not a fait accompli
The boss of Telford Homes doesn’t believe Brexit will affect housing demand but said he wished the move to leave the EU had never happened.
Speaking to Housing Today after the group announced its annual results, the housebuilder’s chief executive Jon Di-Stefano (pictured) said he opposed Brexit, as he explained why his company was shifting its emphasis towards delivering more build-to-rent homes.
Di-Stefano said the housebuilder was mindful of the potential impact of political upheaval in the future, but he said Brexit – “even if it turns out to be a disaster” – would not change the need for housing or the level of demand for housing across the country.
He also suggested the UK might not actually leave. “I don’t believe Brexit is a fait accompli,” Di-Stefano said. “And I’d much rather it didn’t happen at all.”
And with housing minister Kit Malthouse making a bid for the leadership of the Conservative Party -– and consequently becoming the UK’s next prime minister – Di Stefano said he wanted to see the housing brief become a cabinet position in order to get the focus it deserved.
Speaking about his firm’s move towards increasing the proportion of planned build-to-rent (BTR) homes in its development pipeline di Stefano said this was in line with a shift in demand from investors and customers.
“We’ve been growing the proportion of BTR in our pipeline over the last three years. A year ago we decided to give it a push, when it was 50:50 private sales/BTR. Since then we’ve seen increasing investor demand and growing demand from customers for rental homes, so we’re moving to 70:30 of our 4,900 homes pipeline. The changes we implemented were underpinned by that demand.”
Di-Stefano highlighted a recent report by real estate specialist Knight Frank which suggested the value of the BTR market in the UK would be £75bn by 2025. “It was worth £3.8bn in the year to March 2019,” said Di-Stefano, “which was itself twice the value of the year before. We’re seeing that [trend] in terms of investors coming into the market.”
Di-Stefano said BTR offered lower risk, better capital return and lower debt. “There is less risk on the balance sheet and a security of output in the future compensates for the lower margin that comes with this sort of activity.”
Yesterday Telford Homes reported pre-tax profit of £40.1m for the year to the end of March 2019, down 12% on turnover up 12% to £354.3m.
Di-Stefano said the decrease in profit was partly due to the ongoing shift towards lower-margin build-to-rent activity.
And the group was offering more incentives to private sale buyers than before, such as 5% discounts on the purchase price, offering furniture packs and paying legal fees. “We’re doing this a bit more than we’ve done in the past, but it’s not significant,” Di-Stefano said.
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