Election scaring off homebuyers

HOUSEBUILDER Bellway warned of pre-election jitters in the housing market with some buyers holding back on decisions over fears of tax rises under the next Government.

However, the company said in its half-year results statement that the jitters would not affect its business as it has already secured 97% of the financial year's sales target with three months to go.

Bellway shrugged off the difficulties in the housing market to report an 18.5% increase in pre-tax profits to £91.7m.

In the six months to the end of January, the company said it had sold 2,930 houses, up 7% year-on-year, with the average selling price up more than 6% to £167,000.

The forward order book of £631m is down £4m on last year but Bellway said it was confident about future trading despite difficult market conditions.

Chairman Howard Dawe said it was increasingly selective about land acquisition and was working closer with the Government's Pathfinder programme of helping housing associations, first-time buyers and key workers.

Dawe said: 'The calendar year of 2004 was one of contrasting halves. In the first half, the housing market was extremely buoyant, whilst the second half was tempered by consecutive interest rate rises in May and June, which resulted in customers prolonging their purchase decisions.'

The company announced a 40% increase in its dividend payment to 13p per share, with the payout for the year expected to be up 25%. The shares gained 25p to 830p in morning trading.