Optimism remains over UK housing

The UK property market remains robust despite the recent slowdown, according to mortgage lender Bradford & Bingley and housebuilder George Wimpey.

B&B said the buy-to-let market - in which the bank is a major player - would continue to grow much faster than the wider mortgage market. The comments came as it reported a 6% rise in profits to £280.2m ($532m). Wimpey reported a 19% rise in profits to £450.7m and said recent new home reservations were better than expected.

Recent housing market surveys have indicated that the UK property market has cooled in recent months after several years of rapid growth. Last week, figures from the Council of Mortgage Lenders (CML) indicated that the popularity of buy-to-let mortgages - a key phenomenon of the housing boom - could be waning.

But B&B - which has a 22% share of the UK buy-to-let mortgage market - said that while rates of growth were moderating, the sector "continues to grow at a rate considerably above that of the whole mortgage market". Overall, B&B said that "housing market fundamentals remain strong". "Interest rates and unemployment are both likely to remain at historically low levels, real household incomes should continue to grow and housing demand is likely to outstrip supply into the medium-term." Despite the upbeat tone, shares in B&B were down more than 4% at 325.5p in morning trade as analysts worried over future earnings growth.

Wimpey's profit figures came in at the top of expectations, with the numbers helped by buoyant sales in the US offsetting a slight slowdown in the UK. Wimpey said the UK housing market had proved "challenging" last year. "By late summer, the market in general had slowed sharply across the country and showed no real improvement during the autumn," it added. However, the first seven weeks of this year had produced promising signs, Wimpey said. "Visitor levels and interest in this period have been encouraging and reservations have been at the stronger end of our expectations." Shares in Wimpey were up 6% at 458.5p in morning trade.
