Shift to Houses Helps U.K. Homebuilders Overcome Weaker Market

U.K. homebuilders reacted to the financial crisis by switching from apartments to single-family homes. After a year, the shift is paying off in rising profit margins, helping companies overcome a weakening property market.

The move away from apartments, combined with a 60 percent drop in land prices, may lift operating profit margins in the industry to about 15 percent in three to four years, said Chris Millington, an analyst at Numis Securities in London. That would be the highest since the market’s peak in 2007.