There was good news from the UK house construction sector last Friday morning as housebuilder Bellway announced that it was on course for a 10 per cent increase in half-year sales. However, it also had a warning regarding the mortgage market.
Bellway said: ?Despite Government?s best efforts to stimulate the housing market through a variety of welcome initiatives, there remains a fundamental shortage of mortgage lending on acceptable terms to potential homebuyers. Until this is resolved and the threat of unemployment recedes, consumer finance in many parts of the country will remain, at best, fragile.?
Guardian.co.uk reported that property sales by Bellway were at an average of 91 per week for four months to the end of November, an increase of just over half on 12 months ago, when the property market was entering its slump. The housebuilder also reported that cancellation rates were back to more levels of around 13 per cent.
News from another property company ? Berkeley ? was not so good. It reported a 35 per cent fall in its half-year profits, blaming a reduction in transactions and falling prices.
Berkeley said: ?It is evident that the UK homebuyer is being cautious due to the lack of the ?feel good? factor and this is likely to continue until the general economy returns to sustained growth and employment starts rising again. There are positive signs from equity rich customers, particularly from overseas who have the additional benefit of the depreciation of sterling.?
Berkeley?s profits were down to ?52 million for the six months to October; revenues were down from ?452.6 million to ?290 million; and selling prices averaged ?299,000 ? down from ?399,000.
