Property & Construction Daily

The Property & Construction Daily provides a sector-specific comment from leading analyst Alastair Stewart. His daily perspective provides a round-up of market statements, news, economics and views from the property and construction sectors.

July 3, 2023

Housing transactions dip again in May; News – Modular homes innovator enters administration

Economic data

Housing activity. Total residential transactions in the UK dipped by 2.7% to 80,020 on a seasonally-adjusted basis between April and May and by 25.5% Y/Y to 74,360, non-seasonally adjusted, according to the HMRC (from Friday). This is the second consecutive SA monthly fall, after a 7.7% decline in April. Non-seasonally adjusted transactions rose 9.9% between April and May.

Viewpoint:  The fall in transactions took time to feed through after the mortgage lending hiatus following the 23 September mini-budget, since the HMRC data registers transactions at completion – many of them with mortgages already secured. By contrast, Bank of England mortgage approvals started falling immediately. From August, pre-budget, to May, BoE transactions have fallen by 31% (SA) while HMRC transactions have fallen by 23%. This, on one hand, suggests there may be further declines in completed transactions; on the other, it could suggest a large proportion of relatively unaffected cash transactions. More positively, BoE mortgage approvals actually ticked up M/M in May, by 3.1% (albeit before the latest disappointing inflation figures triggered another wave of mortgage tightening). Another factor to bear in mind over the coming months – although harder to quantify – is that the process from mortgage approval to finished transactions is likely to stretch out longer, weighing further on the HMRC transaction numbers.

In other news …

Modern methods of construction (MMC). Modular house builder ilke Homes has been placed into administration (on Friday) after failing to find a buyer for the business, Clare Kennedy, Joint Administrator at AlixPartners said: “Unfortunately, the market and economic headwinds have proven too strong to overcome, thus leading to today’s appointment”. According to, ilke’s management and backers had spent the last few weeks trying to find a buyer or investor to and approached a trio of major volume house builders but could not tempt them to make an offer even after inviting nominal bids of over £1. The firm’s deepening problems came to a head earlier this month when ilke told its 1,150 staff not to come into work until further notice, although they were reportedly remained on full pay. Established five years ago, ilke had a reported pipeline of 4,200 homes ordered by clients including major institutional investors, housing associations, volume house builders and local authorities. Just six months ago, ilke announced it had raised £100m from new and existing shareholders, although it is not certain whether all this funding was released. US-based investor Fortress led the equity investment fundraise, with existing shareholders TDR Capital and Sun Capital also subscribed. This came after a £60m injection in November 2021. The latter fundraise was split between a £30m loan from government agency Homes England and £30m of equity from investors.


Meanwhile, reported today that privately-owned Weston Homes’ MMC business,  British Offsite, has invested £45 in a new 137,000 sq ft robotic factory in Braintree to produce light gauge steel systems, like ilke’s, but in 2D panels, rather than 3D ‘volumetric’ modules.

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