Housebuilders to pay record £2.6 BILLION* to investors – despite housing shortage

*that’s enough to build 11,400 new homes

BRITAIN’S biggest housebuilders are poised to dish out a record £2.6 billion in dividends to shareholders this year – despite failing to tackle the housing crisis.

The staggering amount to be handed out mainly to City investors in 2019 – largely as a result of t axpayer- funded schemes – is enough to build 11,400 houses.

It is vastly higher than the £50 million paid out in 2012 – a year before the controversial Help to Buy scheme was launched.

Critics say the scheme, launched by George Osborne when he was Chancellor, has fuelled house price rises, boosting the profits of builders who now have so much spare cash they have heavily ramped up returns to shareholders – often in the form of ‘special dividends’ – rather than building extra homes.

Bovis Homes and Persimmon have already revealed that they will report record profits for last year, with the latter’s set to top £1 billion for the first time. And this week, Barratt Developments will unveil a bumper dividend when it becomes the first builder to reveal financial results this year.

Yet fewer than 230,000 new homes have been built in each of the past ten years, well below the Government’s 300,000 target.

Research by Heriot-Watt University last year said England needed nearly 4 million homes to deal with the growing housing crisis – or 340,000 a year until 2031.

Analysis by The Mail on Sunday shows the 11 biggest listed housebuilders will pay out £2.63 billion in dividends t his year, up f rom £ 2.48 billion in 2018. That puts housebuilders among the highest yielding stocks on the FTSE 100.

Yields – the amount shareholders receive compared to the market value of their stock – have risen in recent months because of share price falls due to Brexit jitters.

Paula Higgins, chief executive of the HomeOwners Alliance, said: ‘What’s shocking is not only are housing firms not building enough houses, but the quality of those they do build is poor. They are paying out big dividends linked to Help to Buy and yet they’re throwing up substandard housing.

‘All this extra money is going into their own pockets and those of their big shareholders instead of being reinvested into society.’ Despite last year’s row over the £75 million bonus for former chief executive Jeff Fairburn, Persimmon is set to pay the sector’s biggest dividend of 2019 at £746 million.

That tops last year’s £730 million due to extra shares given to 130 senior managers including Fairburn as part of its bonus scheme. Based on the current share price, the yield is nearly 10 per cent. Taylor Wimpey has increased dividend payments by 20 per cent for this year and is set to pay out £600 million, up from £500 million in 2018 – a yield of 11 per cent.

Barratt Developments is set to up its dividend from £435 million to £450 million this year, according to analyst forecasts. That would be a yield of more than 8 per cent.

Last month, Berkeley Group said it would keep paying its £280 million- a- year shareholder returns until 2025, having previously planned to pay them until 2021.

Other builders set to pay more to shareholders in 2019, according to analyst forecasts, include Bovis at around £140 million; Bell way, £169 million; Redrow, £79 million, Countryside Properties, £50 million; and Telford Homes, £ 14 million. Two expected to keep their dividend at the same level as last year are Crest Nicholson, £76 million, and McCarthy & Stone, £29 million.

Recent data shows the average UK house price was £230,630 in October – so the £2.63 billion in dividends could build 11,400 homes.

Housebuilders are so flush with cash that analysts believe even if there is a crash, they will still be able to pay out large dividends.

Persimmon is thought to be the most cash- rich company of any type on the FTSE. It revealed last month its cash balance including debt stood at £1.05 billion.

Greg Beales, of housing charity Shelter, said: ‘Piecemeal schemes such as Help to Buy have made the situation worse by inflating house prices – while doing next to nothing to help those most in need.’

Reuben Young, of campaign group PricedOut, said: ‘Private developers are able to make huge profits while not delivering at the pace we need because successive governments have created a system in which builders build homes only as fast as they can be bought up without reducing prices.’