The_Guardian_-_2016-12-29

Russ Mould, investment director at the stockbroker AJ Bell, said: “A profit warning from FTSE 250
firm Bovis is another crack in the wall when it comes to the housebuilders sector.”
Bovis insisted there was no impact from the Brexit vote in June. A spokesman said there had been
delays in getting the final sign-off for 180 houses before the end of the year, so people had not moved
in yet – a logistical issue rather than a fundamental problem, he said. The production delays mean that
instead of 5% growth in house completions this year, there will be growth of 0% to 2%.
Mould said the numbers implied that completions in the second half fell by 1%-2% year on year,
“raising questions as to whether the market is slowing down in a post-Brexit [vote] world after all”.
Bovis said its average sale price was up by about 10% this year to £255,000. Mould said this
implied a “marked second-half deceleration, as prices rose 14% to an average of £254,500 in the
first six months of this year”.
Photograph: Company accounts/AJ Bell
The housebroker Numis cut its 2016 profit forecast by 11% to £165m, but left its 2017 estimate
unchanged at £196m.
The Numis analyst Chris Millington said: “Obviously it is disappointing to reduce forecasts again and
in our view this reflects company-specific factors, with the fundamentals of the new-build market
remaining robust [although with flatter house price inflation and some cost inflation] due to the helpto-buy
scheme and low mortgage rates.”
The coming year is set to be the first since the financial crash of 2008 in which the UK builds
200,000 homes, the housebuilder Redrow predicted on Wednesday.
The government has set a target of building 1m homes by 2020 and a £2.3bn housing infrastructure
fund was unveiled in the autumn statement last month, which was welcomed by the industry.Shortly
before the EU referendum, a group of 17 UK housebuilders – including Berkeley, Barratt and Crest
Nicholson, but not Bovis – warned that a vote to leave the EU would make it harder and more
expensive to build homes.
The property market slowed straight after the Brexit vote but has held up better than expected along
with the rest of the economy in the months since June.
However, analysts expect the economy and house price growth to slow sharply next year. Savills, the