HOUSEBUILDER Bellway said it has already taken a couple of reservations under the Scottish Government's MI New Home scheme and is confident it will match the success of the NewBuy programme south of the Border which has accounted for 10% of its sales in recent weeks.
The company, which has developments across the central belt, reported a "steady improvement" in home sales north of the Border.
Bellway's profit gains in recent months have largely come from sites in southern England but it is hoping for greater earnings from Scotland as it starts to bring in sites in towns including Motherwell, Dalkeith and East Kilbride.
In a trading update for the 18 weeks to November 30, Bellway said: "Market conditions remain largely unchanged, however, customers' ability to access higher loan to value mortgage finance has improved slightly compared to the same period last year."
Bellway is a participant in the Scottish Government's MI New Home Scheme, which was launched in October after the NewBuy mortgage indemnity scheme was established south of the Border.
A spokesman said Bellway had already had a couple of reservations via MI New Home and it is hopeful it will have similar results to NewBuy once the selling season restarts in spring.
Bellway reported that one in 10 of its sales in the 18-week period had been through the NewBuy scheme.
Under the MI New Home scheme, a housebuilder puts aside some of the sale price for each home into an indemnity fund.
If the property is repossessed and sold for less than the amount of the outstanding mortgage within seven years, the lender can recover some of its loss.
The Government is keen to see a resurgence in housebuilding to help the economy.
Although home completions have been falling, Scottish Government figures show new projects are rising in number.
Bellway said that UK-wide, its reservations have risen to an average of 100 per week, up 6% on the same period last year. The number of sites it is operating has risen to 213 from 205 a year ago.
Bellway is moving towards selling more family homes as opposed to inner city flats and said its average selling price has risen 4% to £195,800 as a result.
Simon Brown, director of equity research at Northland Capital, said: "Whilst the market is undoubtedly challenging, the strategy in place, plus a more expansionist stance by the Government, offers the template for further recovery."
Mark Hughes, analyst at Panmure Gordon, said: "The outlook for this company is relatively positive, with growth forecast in volumes, prices and margins. That said, the underlying growth in units on a per site, per week basis is low, and underlying prices are stagnant.
"So we are hardly in a building boom."
Rival housebuilder Berkeley highlighted the benefits of its strong presence in the London market where property prices have remained high despite the economic downturn.
Chairman Tony Pidgley said: "London in particular is a city which remains a world centre of excellence, culture and business, and is central not just to Berkeley but to a recovery in the wider UK economy."
The company declared a 15p dividend, its first since 2008, after reporting a 40% rise in pre-tax profit to £142m for the six months to the end of October.
A larger capital return is planned for 2015.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereComments are closed on this article