Government schemes to help home buyers in the UK are having a positive impact on the housing market, three housebuilding companies said this week.
Redrow, Persimmon and Bovis Homes have all announced strong growth in profit and all three voiced support for recent government initiatives designed to stimulate lending and boost activity in the market.
This morning Redrow announced a 50% increase in pre-tax profit to GBP23.0m for the last six months of 2012. The company’s chairman, Steve Morgan, welcomed the government’s attempts to improve the market through the NewBuy scheme, the extension of FirstBuy and the Funding for Lending scheme. He added that, if the current trend in reduction of mortgage rates continues, it will assist in the housing market’s gradual return to more normalised conditions.
On Monday Persimmon reported a 52% rise in pre-tax profit for the whole of 2012, to GBP225.1m, and said that its forward sales had passed the GBP1bn milestone, an increase of 9% on last year.
Mike Farley, group chief executive, commented that the company welcomes the government initiatives to support customer activity through FirstBuy and NewBuy. Group chairman Nicholas Wrigley noted that the availability of mortgages remains the key constraint on the housing market but said there are signs that lenders are embracing the Funding for Lending scheme.
Also on Monday, Bovis Homes posted a 69% increase in pre-tax profit to GBP54.1m for 2012. The company said that NewBuy activity is increasing and the second phase of the FirstBuy scheme will provide further support for first-time buyers in obtaining finance from lenders.
Chief executive David Ritchie added that although the positive effect of the Funding for Lending scheme is not yet clear in the published mortgage approval statistics, there is a growing consensus that the impact will be seen in mortgage approval data over the coming months.