A stunning 60% rise in sales helped Bovis Homes share in the housebuilding industry’s Budget-inspired revival today as buyers flooded to its sites.
Chancellor George Osborne’s Help To Buy scheme and brighter economic news have put rocket fuel under the housing market since April, underpinning a fall in mortgage rates brought about by the Bank of England’s Funding for Lending scheme.
Bovis said sales reservations were “ahead of its expectations”, up 40% year on year for the first six months of 2013. Since April, the improvement has been even more dramatic as the firm’s sales per site leapt 60% ahead of the prior year.
The news follows bullish updates from a raft of builders including Taylor Wimpey and Redrow, which made an unscheduled announcement last week to flag up a “material” upgrade to profit hopes.
The firm said: “Even though the general economic background remains challenging, the housing market has shown signs of strong improvement. Consumers are increasingly able to access mortgage finance and the launch of the Help to Buy shared equity scheme... has had a positive effect on customers’ confidence to buy a home and their ability to transact.”
Bovis shares today added 27.25p, or 4%, to 802.25p. Panmure Gordon analyst Mark Hughes upgraded full-year profit forecasts from £72.1 million to £73.8 million.
