Aporte realizado por Carolina Salinas
House builder Bellway has seen its Scottish sales halve as the housing market slump erupted with full force north of the border.
The company sold 2014 homes UK-wide in the six months ended January 31 it said yesterday, compared to 3252 the year before.
In Scotland, it sold just 149 homes over the period as the property slump that spread north of the border towards the end of last year deepened further.
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Finance director Alistair Leitch said: "Volumes in Scotland have come down really dramatically in the period. We are down about 50% in Scotland."
The company, which has developments across central Scotland including in Edinburgh, Glasgow and Fife, is seeing a stark geographical divide.
Completions are down 14% in the south of England but in the north of the country is more like Scotland with sales off 59%.
Bellway sank to a pre-tax loss of £48.6m for the period after taking a writedown of £66.3m on stocks.
But news that gearing is 20.7%, low by industry standards, and it remains on track to cut its debt from £198.8m currently to £120m by the summer boosted its share price by 29p, or 4.5%, to 677.5p.
Panmure Gordon analyst Mark Hughes said: "Trading conditions remain tough, but with low levels of gearing and a well-run business model, we believe that the group will exit the current slowdown in excellent shape."
Overall prices achieved by Bellway fell from £174,800 last year to £156,100 but prices were down as much as 40% in the worst hit locations, the company said.
It is typically offering incentives worth 5% of the selling price, sometimes by cutting the price of the property but often in the form of curtains and carpets, part-exchanges with the buyer's current home with incentives such as part exchange for former homes or furnishings.
"When people come in the door almost the first thing they say is I know it costs £166,000, I want to pay £156,000. By the way can I part-exchange on my current house and I want curtains and carpets'," Leitch said.
He added that some investors are demanding a 40% discount on a property's current valuation, a price he says Bellway will not consider but he says other companies with debt problems are "forced sellers" who are agreeing to such deals.
Bellway has continued building small batches of homes, recently approving another half-dozen to go up in Carntyne, Glasgow. It is sitting on a stock of around 850 homes, around twice the normal level.
"While we are saying it is double where we would want to be we realised we would want to have more in this current climate because we want to benefit from some-one who has a mortgage arranged and wants to move in quickly," Leitch said.
The company is seeing record numbers of cancellations, some 26%, as buyers discover that banks are not prepared to lend to them on the terms they expected.
There are signs of a pos-sible turnaround with reservation levels in the first seven weeks of 2009 up on the last five months of 2008 and only 13% down on 2009.
Leitch, however, remained cautious: "These are merely some small positive steps in the right direction. We are like the baby trying to learn to walk again and making struggling steps forward but we could be sat on our backside again soon."
House builder Bellway has seen its Scottish sales halve as the housing market slump erupted with full force north of the border.
The company sold 2014 homes UK-wide in the six months ended January 31 it said yesterday, compared to 3252 the year before.
In Scotland, it sold just 149 homes over the period as the property slump that spread north of the border towards the end of last year deepened further.
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Finance director Alistair Leitch said: "Volumes in Scotland have come down really dramatically in the period. We are down about 50% in Scotland."
The company, which has developments across central Scotland including in Edinburgh, Glasgow and Fife, is seeing a stark geographical divide.
Completions are down 14% in the south of England but in the north of the country is more like Scotland with sales off 59%.
Bellway sank to a pre-tax loss of £48.6m for the period after taking a writedown of £66.3m on stocks.
But news that gearing is 20.7%, low by industry standards, and it remains on track to cut its debt from £198.8m currently to £120m by the summer boosted its share price by 29p, or 4.5%, to 677.5p.
Panmure Gordon analyst Mark Hughes said: "Trading conditions remain tough, but with low levels of gearing and a well-run business model, we believe that the group will exit the current slowdown in excellent shape."
Overall prices achieved by Bellway fell from £174,800 last year to £156,100 but prices were down as much as 40% in the worst hit locations, the company said.
It is typically offering incentives worth 5% of the selling price, sometimes by cutting the price of the property but often in the form of curtains and carpets, part-exchanges with the buyer's current home with incentives such as part exchange for former homes or furnishings.
"When people come in the door almost the first thing they say is I know it costs £166,000, I want to pay £156,000. By the way can I part-exchange on my current house and I want curtains and carpets'," Leitch said.
He added that some investors are demanding a 40% discount on a property's current valuation, a price he says Bellway will not consider but he says other companies with debt problems are "forced sellers" who are agreeing to such deals.
Bellway has continued building small batches of homes, recently approving another half-dozen to go up in Carntyne, Glasgow. It is sitting on a stock of around 850 homes, around twice the normal level.
"While we are saying it is double where we would want to be we realised we would want to have more in this current climate because we want to benefit from some-one who has a mortgage arranged and wants to move in quickly," Leitch said.
The company is seeing record numbers of cancellations, some 26%, as buyers discover that banks are not prepared to lend to them on the terms they expected.
There are signs of a pos-sible turnaround with reservation levels in the first seven weeks of 2009 up on the last five months of 2008 and only 13% down on 2009.
Leitch, however, remained cautious: "These are merely some small positive steps in the right direction. We are like the baby trying to learn to walk again and making struggling steps forward but we could be sat on our backside again soon."
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