Bovis Homes chief executive Malcolm Harris has warned that house price inflation will more than halve this year
Harris said that Bovis had experienced inflation of 9.4% last year, meaning its average house sales price was £190,600, but expected this to drop to 4% in 2004. To help maintain its pre-tax profit growth, Bovis is aiming to significantly increase the volume of houses it builds this year.

Harris said: "Both this year and next year we will look to increase our volume by 10%. Sales [of housing units] are already up 25% on this time last year."

The Bovis boss also hit out at the market's rating of housebuilders. Harris said that Barratt, Wimpey, Persimmon and Taylor Woodrow should all be FTSE 100 companies, given their exceptional profit and turnover records. Investors have remained wary of housebuilders since the market collapsed in the early 1990s.

The comments were made after Bovis had announced its 2003 results on Monday. Pre-tax profit was £123m, up 17.5% on the previous year. Turnover was £478.4m, up from £461.3m. Dividend payment to shareholders was 16.4p a share, up 17.1% on 2002.

We want to increase our volume by 10%. Sales are already up 25% on this time last year

Malcolm Harris, chief executive, Bovis Homes

In a statement to the stock exchange, Harris said that despite recent heavy increases in prices, affordability of housebuying remained good. He said: "The real cost of servicing a standard rate mortgage is approximately 40% lower than the average of the last 25 years."

n Housebuilder Country & Metropolitan has announced a pre-tax profit of £4m for the six months to 31 December.

This was up from less than £2.4m in last year's interim results, although this covered only the four months after it restructured its reporting dates. Turnover was up 20% to £31m.