Bovis shrugs off housing fears

Bovis Homes yesterday became the second housebuilder in 24 hours to shrug off housing market fears and report “robust” demand for new properties.

The company said in a trading update that it was on track to meet full-year targets after revealing it was fully sold for 2017, its average selling price was set to increase, while “demand for new homes continues to be robust across all our regions and customer interest remains good”.

Bovis’s bullishness comes after rival Taylor Wimpey came out with strong figures and a similarly upbeat outlook on Monday.

Greg Fitzgerald, chief executive of Bovis, said: “Trading is in line with expectations, the market remains strong, and we are on track to deliver another disciplined period end.”

The group said “industry fundamentals” were strong thanks to support from government housing policies including Help to Buy and a “competitive” mortgage market – points also made by Taylor Wimpey.

In its trading update, Bovis said cost efficiencies were targeted at releasing at least £180 million in additional cash flow by the end of 2018, having sold off its shared equity portfolio for some £21.9m and made two land sales that brought in proceeds of £12.9m in the trading period from 1 July to 10 November.

Customer satisfaction averaged 75 per cent on completions since February, Bovis said, suggesting the company is still recovering from compensation costs linked to poor build quality of some homes.

The company has already set aside around £10.5m for affected customers after some homes were sold unfinished and had electrical and plumbing faults.