Wimpey builds new sales strength

TOP three housebuilder George Wimpey today provided strong evidence that Britain's housing market has bounced back to life in time for the key spring selling season.

Reservations for Wimpey's homes for the first seven weeks of this year are at 'the stronger end of our expectations' after a 5% slump in UK sales last year, said chief executive Peter Johnson.

After a sharp drop in sales volumes during the second half of 2004 for the housing market generally, fears had grown of a crash in house prices without a revival in demand by the spring.

Wimpey said in October that it was using more sales incentives to inject life into the sales process. Today, however, Johnson said: 'Visitor levels and interest have been encouraging. Prices have been broadly stable and our use of incentives has been below the level we experienced in the autumn.'

The forward order book stood at £559m at the end of December, £15m ahead of the firm's predictions. Completions last year fell to 12,232 from 12,909 in 2003. 'Affordable' home sales rose 36% to 958 units, offsetting an 8% fall in private home sales to 11,274 units. The full-year dividend is up 31% to 16p.

Wimpey now has 12% more outlets open compared to a year ago to combat the expected slower selling rates compared to the peak during the first quarter of 2004.

The company, meanwhile, continues to power ahead in the US through its Morrison Homes division, where turnover rose 16% to £608.4m. This helped offset slower activity in the core UK business, where turnover rose 1% to £2.3bn. Group pre-tax profits were up 19% to £450.7m.