Housing market to remain buoyant, says housebuilder

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The housebuilder Wilson Bowden predicted yesterday that the buoyant housing market, which aided a 19 per cent jump in profits in the first half of the year, would continue.

Chief executive Ian Robertson said: "It's the strongest July, August that we've seen for many years. Whether or not that's a kickback from April, when we suffered a bit with the start of the Iraq conflict, or whether it's because more people stayed home this year, I haven't a clue.

"What we'll have to do is wait and see if we've had some of our September/October reservations early, which might be the case."

He noted there had been a return of confidence in the South of England.

Wilson Bowden, which does not have any exposure to the London market, is benefiting from particularly buoyant prices in the Midlands and the North.

In the six months to 30 June, the company turned out a pre-tax profit of £91.4m, up from £76.6m a year before - beating analysts' forecasts and prompting upgrades. Shares in Wilson Bowden closed up 22.5p at 1067.5p.

The company said its David Wilson Homes division sold 1,962 properties in the first half of the year, up from 1,825 last year, at an average selling price of £205,000 - up 5.6 per cent.

In the South of England, prices are about 2 per cent higher than last autumn, while in the Midlands and the North, prices are about 10 per cent to 15 per cent higher.

Analysts at Merrill Lynch said the company's financial results were about 12 per cent ahead of what they had forecast, while the average selling price was £3,000 more than they had expected. They lifted their profit forecast for the full year to £215m from £205.5m.

One area of weakness for Wilson Bowden remained its commercial development business, where profits fell to £11.3m from £13.8m. Mr Robertson said he did not expect life to get any easier there for another year.

"We're operating in a very difficult market," he said. "I don't think we're going to see any major change in the commercial side until the economy begins to pick up ... I don't see a significant change until, at the earliest, the second half of next year and it will be totally dependant on the economy."

The company also announced yesterday that it had raised $100m (£64m) through a placing of loan notes with insurance companies. It plans to use the money to cut bank borrowings.

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