Profit rises to £20.3m but chief Harris attacks interest rate rise.
Bovis Homes became the latest housebuilder to unveil an impressive set of half-year results, recording a 20% increase in pre-tax profit to £20.3m for the six months to 30 June 1999.

The housebuilder, which operates outside the central London market, said its second half had begun equally well and would be further boosted by its expansion in the Midlands and North.

Chief executive Malcolm Harris said the market in most of the country was growing at a sustainable rate, but predicted that the fast-growing London and South-east market for high-value homes would soon level off.

He described last week’s 0.25% rise in interest rates as “unjustifiable”. He said: “The strength of the specialist London market is not indicative of the overall market.

“A lot of pent-up demand is being satisfied by high-earning people who have the confidence to buy again thanks to the better job market. But there is a heck of a weighting for London prices.”

Harris said the London correction would come because the current price increases were not sustainable in the long term. He added that demand would be sated by new residential sales in London Docklands and the surrounding areas.

Bovis Homes sold 975 houses in the first six months of 1999, compared with 952 in the same period last year. Average selling price also rose 6% from £99 800 to £106 000. Harris expects to reach £113 000 by the year end.

The company has bought large amounts of land in its northern and central regions in the past six months. On 30 June 1999, it held 9195 plots of land with planning consent nationwide, compared with 8550 at the same point in 1998.

Harris said the company planned to develop a large bank of strategic land [land that is held under option by the buyer]. It held 16 758 potential plots at the end of June, compared with 14 211 at the same time last year.

It also increased operating margins to 18.7% from 17.1%. Harris expects to reach 20% by the year end.