10th Jul 2014 08:15
LONDON (Alliance News) - Telford Homes PLC Thursday said it supports actions take by the Bank of England to maintain "prudence" in the mortgage market.
In a statement ahead of its annual general meeting Thursday, the housebuilder said there are not enough homes being build to meet demand in London, and affordability constraints will act as a "natural break on rampant price inflation unless mortgage lending becomes uncontrolled as it did in 2006 and 2007".
The UK's listed housebuilders were hit hard by the financial crisis and resulting economic downturn, with house building coming to an almost complete standstill in 2009 as the companies focused on retaining cash and paying down debt. The recovery was slow, but has accelerated rapidly since the start of 2013.
The recovery has reached a level this year that has given the Bank of England cause for concern. Mortgage lender Nationwide last week said UK house prices expanded at the fastest pace since 2005 in June. The central bank has moved to slow the rate of growth by asking mortgage lenders to limit the amount they will lend compared to a person's salary and to undertake even tougher stress tests to ensure a customer can repay the mortgage even if interest rates increase.
"Given the clear messages from both the Bank of England and mortgage providers along with the lower loan-to-value mortgages required by the group's typical customers, the board remains confident of longer term stability in its areas of operation," Telford Chief Executive Jon Di-Stefano said.
The company also said it continues to thrive in the buoyant London property market. Most recently it said exchanged contracts for the purchase of a development site in Southwark for GBP19 million.
The site has planning consent for 148 open-market homes and 10 affordable homes in a building ranging from six to 19 storeys, alongside the construction of a new primary school and sixth form academy within the lower levels.
Telford said this acquisition means future revenue expected from the group's development pipeline is now in excess of GBP950 million.
Telford Homes shares were quoted up 3.0% at 314.00 pence Thursday morning.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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