Housebuilder Countryside Properties issued its third negative trading statement in five months last week.
The firm sold 915 homes in the year ended 30 September 2004 – 17% fewer than the 1100 that it had anticipated. It said an “uncertain environment” still existed in the market.
In a profit warning issued to the stock exchange on 23 September, Countryside estimated that, a week before the financial year end, it would sell about 950 homes.
A spokesperson for the company said: “At the time of the last statement Countryside was expecting things to come through, but they didn’t.”
The statement will do nothing to calm City jitters about the housing market. Shares in volume housebuilder George Wimpey dropped 10p in one day after it warned the market that it was experiencing “more challenging” conditions.
In its latest statement Countryside, whose chairman Alan Cherry is leading a proposed management buyout, said: “Potential homebuyers at present appear reluctant to commit to buy or overstretch themselves to do so … an uncertain environment still exists.”
It added that it would increase advertising and buyer incentives, “if considered appropriate”, to achieve sales targets.
Its shares dropped 4.5p to 269p after the announcement last Friday.
Analysts at Dresdner Kleinwort Wasserstein said that the statement was not helpful to other housebuilders: “The group could destabilise the market. Most investors will see Countyside’s problems as largely self-generated, we believe. But it hardly serves to raise confidence in the sector.”
As the market cools, Cherry and the Countryside board continue to try to raise cash for the buyout. Speculation of a rival bid increased this week as the mysterious
Rock Pacific raised its stake in the company to 10.25%.
There was further evidence of the slowing market from Rightmove this week. Its October house price index published on Monday revealed that the rate of price inflation continued to fall in October, that unsold homes rose to a 30-month high and that homes took longer to sell.
Rightmove said that the annual rate of increase in asking prices dropped “sharply” from 16.4% to 13.4%.