Rates for builders profit margins are way down and experts are positing whether or not a lack of council house mortgages may be to blame. One such builder saw a drop in 45% of their profits, and many others have seen worse. Although there is a strong need for council house mortgages, few new properties are being built for this sector and plans to convert these empty builds have not yet come to fruition. It is clear that the problems in the housing market, the council house mortgage market and the general economy are having wide reaching effects throughout the UK and surrounding countries.
“Bearing in mind market conditions, we consider this to be a satisfactory performance,” Bellway said in its trading update.
“The lack of mortgage finance has brought the housing market to a virtual standstill with first-time buyers rapidly becoming an endangered species,” Ian Perry, a spokesman for the Royal Institute of Chartered Surveyors, said.
“Bellway has today set the scene for what is likely to prove a highly bleak half year results season for the UK housebuilders over coming weeks,” said Keith Bowman, equity analyst at Hargreaves Lansdown Stockbrokers.
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