Housebuilders see some market improvement

Published 11th May 2011

Housebuilder Barratt Developments reported a continued improvement in the market after a difficult autumn, and said it was on track to deliver a big increase in full-year operating profit.

Barratt, the country's largest housebuilder by volume, said sales rates had returned to more normal levels in the period from January 1 to May 8, with a 4 percent increase in private selling prices on the same period a year ago, driven by changes in its sales mix.

Rival Bovis Homes, which also reported a trading update for the same period on Wednesday, said the market had remained stable, with visitor numbers for the year to date over 20 percent ahead of the prior year.

However, it noted that the housing market continued to operate well below historical activity levels and said that without an improved availability of mortgage finance it expected to see constrained market activity.

Barratt, which announced a new debt refinancing package that would provide the group with a facility of around 1 billion pounds until May 2015, said it was on track to achieve a substantial improvement in full-year operating profit.

Bovis, one of the smaller midcap listed housebuilders which more than doubled its profit in 2010, also said it expected its profit to increase in 2011.

The news continued a positive turnaround for the sector, which had endured a weak autumn exacerbated by bad weather in December. Rival UK builders Taylor Wimpey and Persimmon both reported positive trading updates in April.

A survey this month showed house prices in England and Wales fell in April at their slowest pace since July 2010, although the market is subdued and likely to remain so for some time.

Source: ' Reuters '

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