Housing Market: Builder Plots Acceleration

The boss of Bovis Homes has told Sky News the company is to step up its building of new houses as the market recovery gathers pace.

David Ritchie was speaking after the builder posted a 19% increase in first half pre-tax profit to £18.6m.

It said that while market house price increases were estimated at up to 2% over the year to date, its own average sale price had risen to £188,500 on average - a rise of 15%.

Bovis, like its competitors, has credited Government measures such as the Help to Buy shared equity scheme for improved activity in the market, benefiting first-time buyers especially.

Funding for Lending has aided borrowers in that it has brought down mortgage costs.

David Ritchie sees construction accelerating this year and next

The company spoke of an acceleration in business, with trading in the 32 weeks to August 9 realising a 43% increase in private reservations to 1,712 homes.

Mr Ritchie said: "The group has performed strongly during the first half of 2013 and has delivered a 50% increase in housing operating profit.

"We have plan in place this year to increase our production by around 25% year over year and we expect to increase our production again in 2014.

"So we are stepping up and building significantly more homes because of the initiatives the Government have put in place and our strategy being deployed."

Official data and other market surveys have all pointed to a recovery in activity, with the Royal Institution of Chartered Surveyors (RICS) suggesting there were signs of a recovery "round the corner" with every region of the country showing growth.

The speed of the market improvement in recent months has led ministers to dismiss fears that the Government's intervention risks creating a market bubble.

The property website Rightmove's latest report found the revival continued in August, despite the month seeing the first dip in sellers' asking prices during 2013.

It said asking prices edged down by 1.8% month-on-month to £249,199 on average - but the string of price increases seen over the last seven months meant they were still £20,000 higher now than at the start of the year.

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