Bovis Homes hit by housing downturn

Bovis Homes has followed other rival housebuilders by reporting a pre-tax loss for 2008 of £78.7 million, compared to a £123.6 million profit the previous year.

It also had to write off the value of its land bank to the tune of £77.4 million, while a further £10 million was written off as a result of the benefits it had expected from its acquisition of Elite Homes in 2007.

Meanwhile, revenue for the company fell 49% to £282 million due to falling house prices and a slump in the number of homes sold.

It had planned to build 3,500 homes for the 2008 year but this figure was halved as it ended up only building 1,782.

Furthermore, like many other construction firms, Bovis has been forced to reduce its workforce due to a fall in demand.

The company’s chief, David Ritchie, described the current environment as the toughest for many years and blamed the difficulties on a lack of available mortgage finance and falling house prices.

For the year to date, the company has secured 772 net reservations, however, this is down by 39% compared with the same juncture in 2008.

Earlier this month, Persimmon said it made a pre-tax loss of £780 million last year, compared with a profit of £583 million the previous year.

Also, Redrow and Barratt Developments announced heavy losses for the second half of last year. Redrow reported a pre-tax loss of £46.2 million, down from a £35.8 million the previous year, while Barratt announced a pre-tax loss of £592.4 million, compared with a profit of £192.4 million the previous year.

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