Miller warns over industry recovery as mortgage lending slumps

The UK's largest privately-owned housebuilder yesterday warned that a slump in lending could cripple a fragile industry recovery.

Miller has seen an "encouraging" 13 per cent rise in sales so far this year, but chairman Sir Brian Stewart said the latest Bank of England figures showing mortgage lending at a nine-month low were "very disappointing."

He said: "The market needs more certainty, politically, economically and financially.

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"It would be unfortunate if, having been through the worst recession in our lifetime, the financial sector failed to provide the products, the liquidity and the conditions for the market to move forward." Edinburgh-based Miller was profitable at the operating level, but a hit on its overseas commercial properties and a 58m interest bill left it with pre-tax losses of 72.4m last year, down from 170m in 2008.

The group said better industry conditions meant it had opened 17 new housebuilding developments since May last year.

Volumes edged up to 2,068 during 2009 despite the firm operating from 12 per cent fewer sites, while cancellation rates have continued to improve during 2010.

Miller's overall revenues fell from 1.05bn to 783m last year as the group cut back on general construction work to concentrate on more profitable projects.

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The construction division – which focuses on health, education and leisure markets – boasted record operating profits of 15.5m and industry-leading margins, although turnover fell by 34 per cent.

The firm handed over the Union Square shopping centre in Aberdeen to developer Hammerson last year. The 120m scheme is its biggest to date.

The company is controlled by the Miller family, which holds 62 per cent of the business. Chief executive Keith Miller owns 28 per cent.