Housebuilders are anxiously waiting to see how next month’s sales pan out after fears that the sector is on the brink of a downturn.
Poor sales figures for September, traditionally seen as the month when the market picks up after the summer, could herald a market slowdown, particularly in London and the South-east.
Housebuilder Fairview, which operates in the South-east, warned of a perceptible slowing in sales at its interim results last week, but said it was not clear if this would affect prices.
Fairview finance director Richard Westcott said the firm was waiting until the autumn to see whether this was a definite trend. He said: “September is when we are going to get a feel for which way it’s really going. The key is whether there will be latent demand out there. If there isn’t, we’re in for a slog over the autumn. The jury’s out.”
Fairview last month mothballed its plans for a management buyout until the autumn, blaming market conditions in London.
Westcott said: “We are having to sell much harder. It’s not a question of just taking the money any more.”
If it’s good in September, life returns a bit to normal. If not, alarm bells will ring
New figures released by two of the UK’s biggest mortgage lenders also point to a housing slowdown.
The Halifax found that UK property prices rose a modest 0.3% last month. The Nationwide Building Society reported that prices had fallen 0.2% in July. Meanwhile, the Bank of England last week decided not to change interest rates.
One analyst agreed that next month would be a key barometer of how the market was performing. He said: “If it’s good in September, life returns a bit to normal. If not, alarm bells will ring.
“Housebuilders that are exposed to London are going to be battening down the hatches if the figures are down. They will have to do nothing for half a year.”
Fairview saw turnover increase 49% to £118.1m in the six months to 30 June. Pre-tax profit rose 38% to £31.7m. The firm sold 660 homes, compared with 711 in the same period last year.