Bovis on track to beat market forecasts as house prices rise 5%

Bovis Homes announced a jump in profits. Picture: PA
Bovis Homes announced a jump in profits. Picture: PA
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THERE were more signs of the returning health of the housing market yesterday after Bovis Homes increased its profit hopes amid improved sales.

The group said it had seen a 15 per cent jump in completions last year, with its strategy of building family homes in the affluent south helping to push its average selling price up 5 per cent to £170,700.

Bovis said it expects pre-tax profits for 2012 to beat City predictions of £51.3 million, after its operating margins jumped to 13.5 per cent, from 10 per cent last year. It said margins were boosted after it sold more homes on land acquired during the housing downturn.

The statement comes days after rival Persimmon reported further growth in revenues. Housebuilders are benefiting from initiatives to help first-time buyers set up by the UK and Scottish governments which are joining builders to stump up part of the deposit.

However, a spokesman for Bovis said that while the government schemes were welcome, they could not be attributed to its performance.

The group said it invested in about 3,500 plots of land across 24 sites in 2012, and sold three plots of land during 2012.

Housebuilders are seeing margins rise because they are selling homes built on land acquired cheaply after the credit crunch.