Developer Crest Nicholson reports slowing house growth in UK

Crest Nicholson today became the latest property developer to report slowing house price growth – but said market conditions remained good.

The group said customers had become more cautious in the second half of last year, following the five interest rate rises since November 2003.

Crest said price inflation had abated and it expected to be operating in a less buoyant housing market in 2005.

However, the company said market fundamentals remained sound, with continued UK economic growth and low unemployment supporting demand.

Planning system inflexibilities were causing housing shortages in southern England, which Crest said would help underpin prices in the coming year.

Announcing its results for the year to October 31, the firm said: “While we expect to be operating in a less buoyant housing market, the quality of the housing land bank and the strength of our affordable and mixed use commercial businesses give us confidence that we can make further progress in 2005.”

Weybridge, Surrey-based Crest, which focuses on residential and mixed use development, has been moving away from supplying high priced accommodation in the South East in favour of affordable housing and expanding its business in the Midlands.

It said today that annual pre-tax profits increased by 10% to £82.1m (€118.3m) on a 17% increase in turnover to £643.2m (€926.5m).

The group sold 2,524 homes during the year, an increase of 30% from last year’s 1,936. Sales of affordable homes rose 131% to 712 from 308 previously.

The average selling price declined to £210,000 (€302,400) from £239,000 (€344,000), which Crest said reflected increased volumes of affordable housing.