Bovis Homes points to market 'stabilisation'

Bovis Homes has said the housing market has shown “signs of stabilisation” in the first six months of 2009.

In a trading update this morning, the housebuilder said that price declines had eased and mortgage approval rates had picked up “albeit from a low base”.

It said: “The short term outlook for the housing market is a continuation of low levels of activity constrained by ongoing illiquidity in the mortgage market. House prices appear to be demonstrating a degree of stability at present, aided by the current low level of second hand homes being offered for sale across the housing market.”

Bovis' completions in the six months to 30 June dropped to 754, from 851 in 2008, while its average selling price fell to £160,400, down from £196,700 last year.

Net debt at the firm shrunk considerably to £14m at 30 June, compared with £94m at the same point last year.

The statement added: “2009 will be a year of delivering strong positive cash flow, repositioning the group's balance sheet with lower work in progress and anticipated net cash in hand at the year end. This should provide the group with the opportunity to invest in the residential land market at what it anticipates will be attractive values.”