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Bovis Homes reports strong improvement in housing market

Kent-based housebuilder Bovis Homes has reported a strong improvement in the market, thanks partly to the Help to Buy scheme.

Bovis said that while the general economic background remained challenging, the housing market had shown signs of strong improvement. Buyers were increasingly able to access mortgage finance and the launch of the Help to Buy shared equity scheme, replacing FirstBuy, had had a positive effect on customers’ confidence to buy a home and their ability to transact.

It said these positive effects were expected to support greater activity in the new homes market which in turn would stimulate more housebuilding. The group, based in New Ash Green, also reported increased profit and higher average selling prices.

In a trading update, the group said there had been strong sales in the first half of the year and had achieved a higher number of reservations - 1,389, a 40% increase over the same period a year ago. Private sales per site were 60% ahead.

For the six months ended June 30, the group legally completed 963 homes - 19 higher than for the same period in 2012. The group’s average sales price on legal completions increased by 15% to £188,500 - up from £164,400 - primarily from the improving mix of homes.

The group, which focuses on building in more affluent regions in southern England, was confident of its prospects to “further enhance shareholder value and continue to deliver improvements in returns over the coming years.”

David Ritchie, chief executive, said: “The group has performed well in the first half of 2013 with a significant further improvement in housing profit, delivered from the ongoing successful execution of the group’s growth strategy.

'There is no doubting the scale and momentum of the housing market recovery across the UK' - Richard Curr, head of dealing at Prime Markets

“Trading in the first half of 2013 has been strong and the group has achieved a 40% increase in private reservations compared to the same period in 2012. Continuing its success in the land market, the Group has added 2,767 new consented plots to the land bank. With the positive progress in executing its growth strategy, the Group is well positioned to deliver higher shareholder returns.”

Richard Curr, head of dealing at Prime Markets, said: “There is no doubting the scale and momentum of the housing market recovery across the UK, but in spite of solid updates last week from Taylor Wimpey and Redrow, Bovis Homes steals the show, both in regard to the 40% surge in private reservations and the group’s canny strategy of building a quality landbank during and after the credit crunch.”

Bovis is due to issue its half year results on August 19.

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