Bovis Homes sales down 39%, more cost-cutting ahead

Bovis Homes has announced plans for a further round of cost-cutting, after revealing that it would complete just 1,800 homes in 2008, a drop of 39% on last year.

The house builder has already shed 40% of its staff since January, and now plans further cuts to reduce annual overheads to below £45m.

In a statement today, Bovis Homes described the first half of the year as "the worst trading environment" for many years. Its profit margin is being hit hard, and the firm said it expected to make a write-down on its inventory in December.

The house builder added: "The lack of mortgage finance, as evidenced by the 70% year over year decline in mortgage approvals for home purchase reported for the third quarter of 2008, has led to a sharp decline in home buying activity.

"This, together with the general economic outlook, has weakened the confidence of prospective home buyers which is now creating further drag on housing transaction activity and placing downward pressure on house prices."

Bovis Homes now plans to focus on selling completed homes properties - mainly houses rather than flats - which return a full cash margin on sale.

So far this year, the house builder has shut its eastern office in Cambourne, Cambridgeshire, as part of 400 job cuts, and has merged the its northern and central regions.