Housebuilder Bellway is on course for a 10% increase in half-year sales but warned that a shortage of mortgage finance continues to stifle the housing market.
In a trading statement, the company said this morning:
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.
Bellway's sales averaged 91 a week in the four months to 30 November, up 51% on a year ago when the financial crisis sparked a property market slump. Cancellation rates have reverted to more normal levels of around 13%.
In a spate of property news this morning, Berkeley reported a 35% drop in half-year profits, due to a drop in transactions and falling selling prices. Profits fell to £52m in the six months to October, with revenues plunging to £290m from £452.6m. Average selling prices fell from £399,000 to £299,000.
The UK's third-largest housebuilder by market value said:
It is evident that the UK home-buyer 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.
More worryingly, stressed commercial property loans have rocketed and pose a growing threat to the faltering recovery in Britain's banking sector, according to a report from De Montford University published today.
Meanwhile, Taylor Wimpey's chairman Norman Askew said he would stand down by the end of the year. The former chairman of Taylor Woodrow oversaw the company's merger with George Wimpey in July 2007.
