by business editor Trevor Sturgess

The housing market is expected to remain challenging this year, according to a Kent-based house builder.

In a trading statement issued today, Bovis Homes Group, with offices in New Ash Green, near Dartford, said trading conditions would remain challenging against a backdrop of continuing economic and employment uncertainty.

First-time buyers also faced "ongoing" challenges given historically low levels of activity and the large deposits required by lenders.

But the group was bullish about its own prospects, with higher volumes and average prices, and improved profit margins. It forecast a significant profits rise in 2012.

David Ritchie, chief executive, said: "The group is well placed for 2012 with increasing active sales outlets and stronger profit margins.

"Based on current market conditions continuing, the group can deliver significantly increased profit and, coupled with improving efficiency of capital employed, a stronger return on capital employed in 2012 and beyond."

Bovis legally completed 2,045 homes in 2011 (2010: 1,901), up 8%. The average private sales price increased by 4.5% to £180,100 in 2011 (2010: £172,400).

This increase was almost entirely due to the improved mix of homes as the Group increased the contribution from family homes in the south of England.

Combined with the higher proportion of social homes, the overall average sales price in 2011 was £162,400 (2010: £160,700).