House building shows signs of recovery
Trading statements issued by two major house builders today have indicated the market has picked up in the last six months.
In an update for the 12 months to 30 June 2009, Barratt says visits to its sites increased by 11.9 per cent between the last six months of 2008, and the first six months of 2009.
Private reservations were up by 15.4 per cent on the first half of its financial year, and its cancellation rate fell from 37.4 per cent in the equivalent period last year to 19.9 per cent.
Completions are down on 2008, falling from 18,588 to 13,202, and selling prices have decreased by 14 per cent from £183,100 to £157,000. Full year end results will be announced in September, but the group said it did not expect to make any further write downs in the value of its land.
Group chief executive Mark Clare said: ‘During the last six months, the early signs of stability we saw at the start of 2009 in the new housing market have continued, underpinned by limited stock and improved customer sentiment.’
In a separate update Galliford Try also reports ‘positive signs’ for house building. Although its completions for the year ending 30 June are down from 2,524 the previous year to 1,769, it says ‘the second half of our financial year has been far more encouraging than the first’.
The builder has carried forward £161 million of sales, and says ‘pent up demand is becoming evident from the level of visitors to our sites and by reservations’.
It adds: ‘We are encouraged by the positive signs in housing, albeit the overall market remains challenging.’
Barratt also sounded a note of caution, stating: ‘Confidence remains fragile and sustained recovery will depend on the wider outlook for the economy, particularly the availability of mortgage finance which remains highly constrained.’
Earlier this week rival builder Persimmon issued a trading update saying sales during the first half of 2009 are up on 2008, and that house prices are stabilising in some areas.