Archive for September 10th, 2010

A new breed of housebuilding chief is emerging. The credit crunch has hatched a hybrid that is leading a revolution in how the industry is run.

The bean counter is becoming a housebuilder. For hairy-arsed builders who relied on gut instinct and had lime under their nails from apprenticeships on the tools, the idea of an accountant running the business used to be anathema. For a start the financial director would get all uppity and pedantic, questioning board expenses and no sense of humour.

“Just look at those assets,” says the financial director with a sigh. “Yes I know, lovely isn’t she? Starts Monday,” says the chief executive.

Accountants may be able to read balance sheets, but could they read the market? Bury your nose in the company accounts and you will never smell opportunity. A risk-free housebuilder, focused purely on the bottom line, is not only a dull one, but a short-term one.

The age of austerity has spawned a different beast. He knows the numbers and thank goodness for that because he has been able to read the charts and pilot the housebuilding ship through the choppiest of waters.

Restructure; reduce debt; create cash from the tired old assets -stock houses - and buy shiny new assets - land - at the bottom of the market. Then you can create nice houses for the right price that people want to buy.

Today’s housebuilding bosses have three hats on the stand in their office. The hard one, the numbers one and the entrepreneur’s one.

I can pick three at random, who are all annoyingly young and gifted. Rob Perrins, a charted accountant out of Ernst & Young, is now group managing director at Berkeley; David Ritchie, ex KPMG, has also graduated from the FD seat to chief executive at Bovis Homes, while Pete Redfern, another KPMG alumnus, made the same step up at Taylor Wimpey.

They have all seen incredibly turbulent times and the industry is not out of the woods yet, but perhaps finally housebuilding has learnt the lessons of previous downturns. These three, and I’m sure others out there, have been forged in the furnace of financial adversity and crunched the numbers.

Their training and nature will ensure they always keep one eye on the balance sheet. But they are also emerging as natural housebuilders too, with flair and energy and ready to take a risk - not a big one, but a risk nonetheless. The gut instinct and the more relaxed expenses regime will hopefully follow when they buy me lunch.

Rupert Bates is editorial director of What House?.

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