Housing market recovering but ‘long way from buoyant’, housebuilder says
Crest Nicholson highlighted ‘encouraging signs emerging in the UK housing sector’.
Falling mortgage rates and wage rises are helping the housing market to recover, housebuilder Crest Nicholson has said as it revealed its profits tripled in recent months.
The Surrey-based company nonetheless said it sold fewer homes over the first half of its financial year.
Chief executive Martyn Clark said while conditions in the broader global economy are uncertain, there are some “encouraging signs emerging in the UK housing sector”.
He added: “We remain mindful of volatility in the macroeconomic backdrop, which continues to impact consumers through concerns around affordability and job security.
“However, the market is now starting to benefit from increased lender support and better mortgage affordability as the interest rate environment starts to ease.”
Wage growth is also making home buying more affordable for people, he said.
“However, we remain a long way from a buoyant market,” Mr Clark added.
Crest’s pre-tax profit jumped to £7.9 million in the six months to the end of April, from £2.6 million the year before.
The total number of completed sales fell to 739 from 788 the prior year – which it said was down to it deliberately doing less “bulk” housing sales, instead focusing on the “mid premium” market.
Average selling prices also dipped to £342,000, from £349,000 last year, which reflected the company selling a higher proportion of affordable homes.
Cheaper mortgage deals have been entering the market since UK interest rates started being cut last year.
Estate agents and lenders also reported a surge in activity ahead of April, when stamp duty relief became less generous for buyers.
Furthermore, Crest said the Government’s efforts to reform the planning system to reduce bottlenecks and reintroducing house building targets were slowly but surely leading to improvements in the market.
On Wednesday, Chancellor Rachel Reeves announced she was allocating £39 billion to social and affordable homes over the next decade.