Homebuilders Cancel Land Purchases as U.K. Economy Shrinks

(Bloomberg) -- U.K. homebuilders are starting to pull out of deals to buy land as they brace for a hit to demand.

Inland Homes Plc, a firm that specializes in getting urban sites ready for construction, said on Thursday that three deals with large publicly traded homebuilders had been aborted because of the coronavirus pandemic. The canceled deals show how developers are taking a cautious approach to future projects even as they prepare for a return to work.

The nation’s homebuilders are bracing for the fallout from the spread of the deadly coronavirus, which is forecast by Dan Hanson of Bloomberg Economics to lead to the worst economic crash since 1921. The number of private homes built in the U.K. could plunge by as much as 35% this year, according to a report published by broker Knight Frank on Monday. About 82 billion pounds ($102 billion) of home sales are currently on hold, property portal Zoopla Ltd. estimated this week.

Persimmon Plc, Taylor Wimpey Plc and Vistry Group Plc, three of the U.K.’s largest homebuilders, last week set out plans for a phased resumption of construction on their existing sites. That’s after most developers stopped work in March to allow time to develop strategies to complete homes while enabling workers to keep a safe distance apart.

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