Homebuyers stretching whilst housebuilders report record results
‘Homebuyers stretching means to climb property ladder
Data from the Council of Mortgage Lenders shows that in the second half of 2015, 58% of first-time buyers took out mortgages that were beyond the traditional 25-year term. Among movers the figure was 36% – double the proportion extending their mortgage before the housing crash. Affordability pressures have also boosted the number of borrowers taking on loans worth more than 4.5 times their salary. Higher retirement ages and pension freedoms may have encouraged more people to borrow for longer, but the CML said it was mainly a result of the need to stretch incomes to get on the housing ladder.
Source: The Guardian
Bovis reports record results
Bovis Homes has reported record annual profits. The housebuilder’s results for 2015 revealed that pre-tax profit grew 20% last year to £160.1m, up from £133.5m in 2014. Revenue increased 17% to £946.5m, boosted by a 7% rise in average sales prices to £216,600 and strong demand for new homes. The final dividend of 26.3p a share brings the payout for the year to 40p, up 14% on 2014. During the 12 months, the company added 35 sites, equivalent to 6,058 homes, to its land bank. These plots have an estimated future revenue value of around £1.7bn and an estimated profit potential of about £440m.
Source: The Daily Telegraph, The Times‘
We wonder if these two news items could possibly in any way be related.