Developer echoes Bank of England warnings of ‘doomsday’ no-deal Brexit

Pennyfarthing Homes
The developer repeated warnings of plunging prices made by the governor of the Bank of England (Photo: stock image)

ONE of the New Forest’s biggest independent building companies has warned of a potential “doomsday” Brexit if a deal is not agreed with the EU.


In an annual report lodged with Companies House in October, Pennyfarthing Developments Ltd, a construction group based near New Milton, listed one of the most notable business risks as “the uncertainty surrounding Brexit”.

Although confident of the company’s near and medium-term prospects, the report signed off by executive chairman Mark Adams highlighted the risk of soaring interest rates, plunging house prices and stagnant wage growth.

It warned: “The governor of the Bank of England has stated that should a Brexit deal not be achieved then house prices would fall by 35% over three years.

“Sterling would plunge, driving up inflation and interest rates with mortgage companies passing on higher-risk premiums to customers.”

It added: “Whilst we feel this is a complete doomsday scenario, the business firmly believes that a deal will be achieved and will result in continued consumer confidence.

“Nevertheless the business is mindful of any negative impacts and will continue to monitor with caution, with contingencies being put in place should a sudden market shift occur.”

Other issues included recruitment, fire safety design following the Grenfell Tower blaze in 2017, and material and subcontractor costs.

Finance manager Simon Willington told the A&T that despite the uncertainty, Brexit was predicted to have a “minimal impact” on the company – although any drop in consumer confidence might affect house sales.

The report also showed the family-owned firm’s profit of £6.9m in 2017 had dropped 45% to £3.7m in January this year. No dividend was paid, in contrast to £4.1m the previous year.

Pennyfarthing’s dip in annual performance was due to a one-off care home project in Ferndown which inflated the 2017 figures, Mr Willington said, and were otherwise in line with previ-ous results, with employment head-count up by 7% since January.

Mr Willington said: “Our current year is shaping up to be the best year in the business’s 40-year history and we are positive we will grow from strength to strength with a number of new larger sites coming to fruition.”

Pennyfarthing currently employs about 120 subcontractors on site, and is selling proper-ties in New Milton, Lymington, Fordingbridge, Highcliffe and Ferndown.