McCarthy & Stone warns of sluggish Autumn housing market after year-end profit increases by 27%

McCarthy & Stone has increased profit by 27% to £147.8m despite fall in project starts, which the firm blamed on planning constraints.

The retirement home specialist said that it had strong performances from most of its divisions but said that the South East faced some challenges. The Group noted that in October it had become harder to secure reservations across the UK, and that times between reservation and completion had lengthened.

Chairman and chief executive Lovelock said: “There is little doubt that the housing market is cooling, however with an ageing population, the demographics and fundamentals are in place for us to continue to expand our product base and maintain our significant presence in this growing market.”

The Group also announced that Howard Philips would be replacing Keith Lovelock as chief executive at the end of August 2005. Lovelock said he would continue as executive chairman.

Despite the fall in construction starts the group said that units sold increased by 5% to 2,055 for the year ended 31 August 2004, and that it had a record number of planning consents.

The average selling price increased by 18% to £154,300, but the Group warned that higher land and build costs and moderating house price increases would put pressure on future profit margins.

The Group said it was positive about the future of the market and noted that the number of people over the age of 50 would rise from 20 million to 27 million between now and 2031.

McCarthy & Stone said that the housing market had returned to more normal conditions after five-interest rate rises in the last year.