Bovis warns over weak mortgage volumes

City A.M. Reporter
Bovis Homes expects full-year profit to come ahead of estimates on higher selling prices and plans to restart dividends, but the housebuilder warned of a subdued year ahead.

"Mortgage approval volumes remain weak, with mortgage providers requiring high levels of deposit, particularly from first time buyers," the company said in a statement.

British homebuilders are grappling with consumer sentiment hit by higher taxes, government spending cuts and a dearth of mortgage availability.

Earlier this week, leading mortgage provider Halifax said British house prices fell at their fastest annual rate in more than a year in December, while Persimmon warned of little price growth this year.

Bovis said it expects 2010 profit to be ahead of consensus estimates of £16.3m.

Consensus estimates as on Friday call for a pretax profit of £17.1m.

The company, with a sales order of 420 homes for 2011 delivery, completed 1,901 homes last year, compared with 1,803 in 2009. Average sales prices were up 4 percent at 160,700 pounds, on higher average private sales prices.

Bovis also said it will pay 2010 dividend in May.

Bovis shares, which have risen over 20 per cent since the company reported a rise in sales rates in November.