Britain's housing market appears to be bottoming out after Bovis, the Kent-based housebuilder, reported a steep increase in reservations.

Bovis, based in New Ash Green, said private home reservations had risen by 92 per cent in the first half of 2009.

Legal completions grew by 18 per cent to 738, although the average price for private homes was £160,400, compared to £196,700 in the first six months of 2008.
The company said that the housing market showed signs of stabilisation, with a slowing in

he rate of house price decline. The number of mortgage approvals had increased, albeit from a low base.

However, the number of transactions remained at “historically low levels,” with pricing “substantially below” the peak levels of 2007.

The outlook for the market was a continuation of relatively low levels of activity.

Although half-year revenue was lower than the same period in 2008 - down 18 per cent from £149.3m to £122.6m - it made a pre-exceptional profit of £1.2m. Costs were reduced by 48 per cent as the company has shed jobs in the past ear.

David Ritchie, chief executive, said the group had made good progress during the first half of 2009. It had generated £94m of cash inflow and cut net debt to £14m.

“The Group is well positioned now to take advantage of an increasing number of opportunities to invest in new consented residential land assets,” he said.

But he acknowledged that rising unemployment and uncertainty about the future of the economy made it important for the company to show caution.

Ed Woolfitt, head of trading at Galvan Research, said Bovis provided ample evidence of a bottoming out in the housing market. Results were in line with others in the sector such as Bellway and Taylor Wimpey earlier this month, August.

“Galvan Research still believe the momentum is very much with housebuilders and construction companies as recovery plays,” it said. “Consequently we still view the shares as a buy.”