Housebuilder Wilson Bowden says land prices are continuing to rise despite signs of a slowdown in the housing market
The firm claims this is because the planning system is restricting the supply of land. David Wilson, chairman of Wilson Bowden, said: “This imbalance continues to fuel increases in prices.”
Wilson said competition for sites was as keen as ever but that the firm had managed to buy enough land to meet its needs. It spent £161m on land in the half year to 30 June, an increase of £8m compared with the same period last year.
The group posted record results, with pre-tax profit rising 28% to £118m on turnover of £592m.
Wilson said the firm was on target to complete 5000 properties in 2004, although the market was beginning to cool. He said: “There are some signs of sales becoming tougher to achieve as incentives rise and customers take longer to sign up.”
Graham Brown, finance director, said the firm had increased its margin requirement. He said: “It gives us a bit of security if the market becomes more difficult. It reduces the amount we can spend on land, which forces us to make better use of the land we have.”
There are some signs of sales becoming tougher to achieve
David Wilson, Wilson Bowden chairman
David Wilson was doubtful that the group’s commercial arm would see a significant improvement in market conditions. He said: “There’s little sign yet of a significant revival in the commercial market.”
n Troubled support services group Jarvis is to sell its University Partnership Programme, which provides and operates student accommodation, to the Alma Mater Fund. Jarvis said on Wednesday that the sale was “not expected to be material in the context of the Jarvis Group”. The Alma Mater Fund is a joint-venture partnership managed by venture capitalist 3i and Barclays Private Equity.
Jarvis has appointed Alistair Rae finance director. He was previously director of strategy and corporate affairs and had been appointed acting finance director after Robert Kendall resigned in the spring. Chief executive Kevin Hyde described Rae as a “crucial figure in our recovery process”.