Challenges for housebuilders.

Economic woes hit house sales

Published:  16 June, 2010

NEWCASTLE: Housebuilder Bellway said concerns over government spending cuts had hit sales rates. Proposed reform to the planning system could be a further obstacle to recovery, the company added.

"Since the General Election, uncertainty concerning anticipated government fiscal policy and spending reviews has resulted in a slight reduction in both site visitor levels and weekly sales rates," said Bellway in an interim management statement today.

A tentative recovery in the property market is also likely to be undermined by new planning red tape that will devolve more planning power to local levels, but may hinder new projects in the short-term. "Possible changes surrounding the planning system could pose new challenges to the business," said Bellway.

House prices rose last month at their fastest rate so far this year, driven by price gains in London and South East of England, a survey by the Royal Institution of Chartered Surveyors reported showed.

However, surveyors were less bullish about the pace of future price rises as the amount of property for sale had risen sharply following government withdrawal of homebuyer information packs. RICS said its members expected the abolition of HIPs to increase the supply of property by 15%.

The survey showed price rises in London, the South East, North and North West of England as well as Scotland, whereas prices fell in Northern Ireland, Wales, Yorkshire and Humberside and the West Midlands.

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