Unemployment, the availability of mortgages, and an increase in supply of properties for sale in the second-hand market could be factors that disrupt the housing market becoming stable, according to one of Britain?s leading house builders in an article on Telegraph.co.uk.
Bovis Homes, in its interim results statement, said despite signs of a slowdown or a reversing of the rapid falls in house prices since two years ago, they were cautious about the prospects for the market. There are concerns that the improvement will be overlooked because of a lack of supply leading to house builders holding back on development and homeowners deciding not to sell their homes due to the state of the economy.
Bovis chairman Malcolm Harris said transaction volumes are at ?historically low levels? and raised concerns about unemployment levels ? which are at their highest levels since a decade ago ? and the potential for deals to be cancelled or delayed by surveyors arriving at mortgage valuations below the buyer?s agreed price, as well as other issues. ?The short-term outlook for the housing market is a continuation of relatively low levels of activity constrained by ongoing illiquidity in the mortgage market,? he added.
For the six months to 30 June, Bovis?s revenues fell 18 per cent to ?122.6 million as its gross margin tumbled from 26.3 per cent to 16.2 per cent because of house prices falling. The number of legal completions fell 11 per cent to 754.
Bovis are also facing a pre-tax loss of ?8.6 million, due to the write-downs in the value of their land being totalled at ?8.9 million. The company made a profit of ?9.5m in the same period last year. On a positive note, their net debt was reduced by ?94 million to ?14 million.
