Housebuilder Crest Nicholson has reported plummeting pre-tax revenue and warned of a slowdown within the housing market if rates of interest proceed to rise.
The agency posted adjusted pre-tax revenue £20.9m for the six months to 30 April, down by 60 per cent on the identical interval the earlier 12 months, whereas income slumped by over a fifth to £283m.
Residence completions fell from 1,096 to 894, though common promoting costs remained sturdy.
The corporate mentioned the figures mirrored the turmoil of last September’s mini-budget, which led to financial uncertainty and shaken confidence within the housing sector.
Chief govt Peter Truscott mentioned: “Quickly falling client confidence and rising rates of interest instantly translated into softer demand within the housing market,” including. that regardless of the financial case for dwelling possession, the upper price of borrowing and the tip of Assist to Purchase had been proving “prohibitive” for a lot of first-time consumers.
“If rates of interest proceed to rise, and stay elevated for a sustained time period, this may undoubtedly exacerbate this difficulty even additional and begin to influence demand and confidence once more,” Truscott mentioned, calling on the federal government to supply additional assist to potential owners.
Regardless of this, Truscott mentioned: “On the time [of the mini-budget] we outlined that, with a package deal of smart measures to revive financial stability and belief, the market would stay resilient and this has confirmed to be the case. As we traded by means of the interval, confidence began to return and this has been mirrored in our buying and selling metrics, which have sequentially improved all through the interval.”
Unemployment remained low and mortgage availability good, albeit at dearer charges, he mentioned, whereas the continued lack of housing provide continued to assist home costs, and was additionally driving sturdy ranges of rental inflation.
Earlier this 12 months, Britain’s largest housebuilder Barratt warned of a severe slowdown within the housing market, blaming heightened rates of interest and political and financial uncertainty.
Crest Nicholson mentioned its disciplined method to land acquisition, supported by a robust stability sheet, had enabled it so as to add a number of high-quality websites to its portfolio, supporting its growth plans and positioning the agency for future development.