LONDON, March 27 (Reuters) - British housebuilder Bellway has high hopes
for a new government scheme to help first-time buyers, it said on Tuesday, as it posted a jump in first-half profit driven by its focus on family homes in the more prosperous south of the country.
'It's a good confidence boost at the right time in the housing market,' Chief Executive John Watson said on Tuesday of the government's NewBuy Scheme.
The scheme allows lenders to provide 95 percent mortgages on new build properties worth up to 500,000 pounds ($796,800) with guarantees from the government and developers. Many new buyers have been frozen out of the market because banks have cut back on lending since the 2008 financial crisis.
Britain's fourth-largest housebuilder by market value cautioned, however, that the scheme was unlikely to have a major effect on completions in the current financial year.
'We're only two weeks in, so people are just going through the process at this point in time, but certainly it's sparked an awful lot of interest at site level on individual developments,' Watson told Reuters in a telephone interview.
Bellway said pretax profit jumped 69 percent to 40.6 million pounds ($65 million) in the six months ended January, in line with a consensus estimate of 40.1 million provided by the firm.
Visitor numbers had increased since the beginning of the calendar year, the company said, adding its forward order book stood at 498.5 million pounds on March 11, compared to 479.2 million pounds the year before.
Bellway's shares were up 0.3 percent at 862 pence at 1010 GMT, having earlier fallen as much as 3 percent. The shares have
increased 59 percent since mid-August, helped recently by speculation it might follow larger rival Persimmon by returning cash to shareholders.
'The whole sector has had a strong run. A combination of that and a lack of any confirmed return is possibly what's holding back the shares a little today,' said Investec analyst Mike Bessell, who downgraded the shares to 'Hold' from 'Buy' but upped his price target to 925 pence from 880 pence.
FAMILY FOCUS IN SOUTH
While Britons are moving home less frequently in the wake of the financial crisis, house prices have held up better than many economists feared, underpinned by a growing population and supply shortages.
Many UK housebuilders, including Bovis and Taylor Wimpey, have prospered by buying up cheap land and focusing on more stable segments, like family homes, particularly in the relatively prosperous south of the country.
The average selling price of a Bellway home rose 8.5 percent to 182,753 pounds, compared to 168,428 pounds last year. Prices in the south jumped by 10 percent, while the north recorded a more modest 4 percent increase.
Watson said the biggest worry for housebuilders was unemployment, which currently stands at 8.4 percent in Britain.
'Wherever there's factory closures, it has ripples. It's that part of the economy we concentrate on and we would like to see those figures coming down,' he said.
The Newcastle-based company increased its interim dividend to 6 pence per share from 3.7 pence in 2011.
'We're one of the few companies that have managed to pay dividends through the bad times. The numbers are relatively small, but in this climate, to get a 60-odd percent increase in divis, we're quite proud of,' Watson said.
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