Thursday 19 September 2019

Bovis says Brexit uncertainty has affected buyers

The housebuilder’s warning follows peer Taylor Wimpey’s comments on homebuyer caution.

Bovis Homes has cautioned uncertainty surrounding the UK’s departure from the EU has put off discretionary homebuyers (PA)
Bovis Homes has cautioned uncertainty surrounding the UK’s departure from the EU has put off discretionary homebuyers (PA)

By Maryam Cockar, Press Association City Reporter

Shares in Bovis Homes fell after the housebuilder cautioned uncertainty surrounding the UK’s departure from the European Union has put off discretionary homebuyers.

Bovis shares down 7.4% at 964 pence a share.

The group is the latest housebuilder to warn over the impact of Brexit worries after Taylor Wimpey earlier this week said it was seeing signs of customer caution, particularly in the south-east of England.

Bovis said while its sales rate had remained stable, “the uncertainty surrounding Brexit has impacted discretionary buyers”.

It comes after official figures on Wednesday also showed house prices in England are growing at a slower annual rate than the rest of the UK, while property values in London are continuing to decline.

George Salmon, equity analyst at Hargreaves Lansdown, said Brexit is “proving to be a fly in the ointment” for UK housebuilders.

“The housing market is already slowing, and the worry is it grinds to a halt in the event of a disorderly Brexit – which would clearly be bad news for the builders.

“A weak secondary market means around 15% of Bovis’ transactions now rely on part-exchange – hardly reassuring,” he said.

Bovis’s sales rate per outlet a week for the year to date remained has steady at 0.51 since July 1, with pricing in line with expectations.

Meanwhile, the company welcomed the Government’s extension of the Help to Buy scheme for a further two years to March 2023.

It said the restrictions to the scheme from March 2021 are not unexpected, and it does not envisage any significant reduction in the use of the scheme for its new homes as a result.

Chief executive Greg Fitzgerald said Bovis is fully sold for the year and the group continues to “target a record year of profits for 2018”.

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