Housing shares fall despite healthy results

by Kathy Watson



Housebuilders are resigned to falling share prices because of recession predictions, despite delivering a healthy set of results this month.

Wilson Bowden's group finance director, Ian Robertson, admitted: "Our share price has plummeted by a third, from £7.30 four months ago to £5.24 currently, in spite of delivering record £36 million interim pre-tax profit. Nothing has changed in the business, but there is the belief that there is going to be a recession, so we have to grit our teeth and get on with the business."

Beazer's share price barely stirred last week, although it posted an interim pretax profit up 27 per cent at £79.2 million, completions up 8 per cent to 7,776 homes, selling prices up 9 per cent to £81,000 and its landbank almost doubled in a year to 23,116.

Housebuilders see little sign of the much anticipated recession, although they are concerned that planning bottlenecks are reducing their manoeuvrability. Robertson believes local authority cost-cutting among planners is weakening the system and causing delays.

Beazer's chief executive, Dennis Webb, urged during his company results that the planning system be disbanded, saying local authorities were crippling profitability with "unreasonable demands."

The bottlenecks are leading to artificially high prices for some plots and housebuilders being forced to capitulate to planners' demands if they want to build quickly.