Major housebuilder claims recent interest rate rises have already slowed the market
Housebuilder Wimpey has warned the Bank of England not to slow the housing market excessively with too many further punitive interest rate rises.
Chief executive Peter Johnson told Building this morning that recent interest rate rises were already quelling price rises. He said that price rises on reservations for Wimpey homes in the UK were down to low single figures in recent months, compared to 13% rises this time last year.
Johnson said: "Our message is that the medicine has worked. I hope the Bank of England is listening. I am sure that interest rates will go up further but our view is that they mustn't go up in a way that damages confidence. They must be careful about not going too far. It should be a 'steady Eddie' approach."
Johnson was speaking after the firm posted better than expected results for the half year to 30 June 2004. Pre-tax profits were up 29% to £158.5m, £9m better than analysts predicted, while turnover was up £160m to £1.219bn for the period.
The firm said it was still buying land. Johnson said Wimpey was looking at acquiring bigger plots as there was less competition for the land. He added that the firm was well placed to buy publicly owned land. He said: "The public vendor is becoming more and more aware of price and the buyer also has to meet sustainability, customer satisfaction and health and safety targets, which we feel plays to our strengths. I think it's good news."