Low sales in North may hit Wilson Bowden's recovery

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The Independent Online

Wilson Bowden, a leading housebuilder, warned yesterday that the market had still not picked up in the North of England, which could scupper hopes of a recovery this year.

The housebuilder said 2005 had seen the "most challenging housing market for many years". But while the end of 2005 had seen a marked improvement in the South, which has continued this year, the North has seen no uplift.

Reporting 2005 financial results, Ian Robertson, Wilson Bowden's chief executive, said that 2005 had started promisingly before turning down in the run-up to the general election.

The south of the country then saw better conditions from October and there was a "slight improvement" in the Midlands. However, the company, which launched a range of low-cost homes yesterday, said the Northern market became depressed in March 2005 and it has stayed there.

Mr Robertson said: "This time last year the market faded away. It's too early to say whether this pick-up will last. It depends on whether the ripples spread to the North."

Wilson Bowden reported a 14 per cent drop in pre-tax profits to £223.7m, before goodwill, for 2005. The volume of sales completions in its main David Wilson Homes division dropped to 5,027 units, from 5,403 in 2004. Mr Robertson said that, as well as the general market problem of weak demand, the company got caught out last year as a result of a change in the mix of homes it offered.

Wilson Bowden ramped up its supply of apartments last year but this was the sector of the market that turned out to be the weakest, as people worried about the price of buy-to-let properties.

"We didn't have the optimum mix last year. But that's been put right," Mr Robertson said.

Yesterday Wilson Bowden launched its "i-Life" range of affordable homes, with prices starting from £65,000. The homes are as small as 300 sq ft but, by putting the living room and kitchen upstairs, and giving it a vaulted ceiling, the company has been able to give potential buyers the illusion of more space.

Mr Robertson said: "This development comes in response to a market where nearly one-third of all households comprise only one occupant; the number of first-time buyers is at its lowest for 25 years; and the Government is calling for more housing at affordable prices."

The first of these i-Life homes will become available in Nottinghamshire this summer. The company is looking to have planning for 500 units by the end of the year. In the South, these homes are likely to start from about £80,000. Some builders have planned to put affordable homes on their own developments but Wilson Bowden will mix them up with more expensive properties at its sites.

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