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Bovis ramps up building as house prices continue to rise


02-24-2015

Property firm says there is political momentum behind its plan to build more homes after a record year

New first time buyer deals are offered on a development in the Parkhead area on March 23, 2010 in Glasgow, Scotland
 
Bovis built more than 3,000 new homes last year Photo: Getty Images

The company, which focuses on properties in the south of England, completed 3,635 property sales in 2014, or 29pc more than a year ago. These sales generated annual revenues up 46pc to £809.4m, while profits before tax rose 69pc to £133.5m.

Bovis has bought 7,300 new plots in the past year, at a cost of £340m, and now has enough space with planning permission to build 18,000 homes. The company aims to build up to 6,000 homes a year in future, which chief executive David Ritchie said will depend on movements in house prices and mortgage rates in the next few years.

Mr Ritchie said that ahead of the General Election, “for the first time in many years, we have significant alignment on political policy when it comes to house-building. There’s a general recognition in this country that we need to build more houses, more than 250,000 [a year] at a minimum.”

Almost 119,000 homes were completed in England last year, according to official estimates.

The average Bovis home sold for £216,000, a rise of 11pc on the previous year partly due to a trend towards building larger homes and increasing demand from buyers.

Sales have been about 2pc ahead of expectations in 2015 so far, the firm said, with 479 reservations and 2,336 sales heading for legal completion this year.

Such is the clamour for new homes that in the past year a shortage of building subcontractors and the rising prices of some materials have pushed up the cost of building a home, although these pressures have eased somewhat recently.

“What we are starting to see is that the supply chain for labour has reacted, and there are more people coming in through training, and people coming back to the industry, moving into the industry,” said Mr Ritchie.

The Help to Buy scheme has also driven sales by improving access to mortgages for buyers with low deposits. The mortgage guarantee for buyers with a 5pc deposit ends in December 2016, while the government-backed equity loans for buyers of new homes has been extended until 2020.

Bovis increased its annual dividend from 13.5p per share to 35p, and plans to pay at least the same amount this year. Shares in FTSE 250-listed Bovis opened broadly flat on Monday, having risen 7.6pc in the year to date.

In a busy week for corporate earnings, rival house-builder Persimmon will report full-year figures on Tuesday, followed by the estate agent Rightmove on Friday and a string of mortgage providers reporting throughout the week.

www.telegraph.co.uk 

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