Tough in North as builder Bellway sees divide

It added that the Yorkshire house market is set for difficult trading conditions this year despite a pick-up in the south.

The group said that its northern divisions are experiencing "testing conditions". "The market gets pretty difficult the further north you come," said finance director Alistair Leitch.

Chief executive John Watson added: "Despite the Government's best efforts to stimulate the housing market through a variety of welcome initiatives, there remains a fundamental shortage of mortgage lending on acceptable terms to potential homebuyers.

"Until this is resolved and the threat of unemployment recedes, consumer confidence in many parts of the country will remain, at best, fragile."

The group said that with mortgage providers continuing to require a high level of deposit, it expects trading conditions during the first half of 2010 to be subdued compared to historic levels.

Bellway, the UK's fifth largest housebuilder by market value, said its operating margin fell to six per cent in the six months to the end of January, compared with 9.2 per cent the year before.

For the full year, it expects operating margin to be in the six to

seven per cent range.

The average house sale price during the period fell slightly to 156,000 from 156,146 in the same period last year.

Keith Bowman, analyst at Hargreaves Lansdown Stockbrokers, said the UK has split into a north/south divide.

"There is a two-speed UK housing market, " he said. "London and the south are clearly enjoying a thawing in conditions, although any warmth has not yet radiated to the north."

Bellway's six northern divisions saw sales tumble 45 per cent to 1,833 homes in the year to July 31. The average northern selling price was down 14.7 per cent to 134,200.

"As the economy in the north receded more quickly, especially in Yorkshire, Scotland and the North West, consumer demand eroded rapidly in these locations, " said Mr Watson.

The group said Yorkshire cities are being held back by an oversupply of high-rise apartments.

"There's still quite a lot of overhang of apartments in cities such as Leeds, " said Mr Watson.

UK house prices recovered in the second half of 2009, with mortgage lender Halifax saying they rose for the seventh consecutive month in January, but warned any uptick in supply could curb the upward pressure on prices.

Bellway said its order book for the period stood at 390m, up from the 296m it was worth in the same period last year.

The company grew its net cash position to 61m from 51m at the end of 2009 and said it was selectively investing in work in progress and land opportunities.

Other housebuilders such as York-based Persimmon, Bovis and Barratt have all issued statements indicating that the stronger autumn selling trading period had continued until the end of the year.

Analyst Imran Akram at Collins Stewart said Bellway had given a

surprisingly cautious outlook.

"The outlook is a little surprising," he said. "First half trading is expected to be subdued, although all the housebuilders including Bellway are reporting strong volumes growth."

Region suffers fall in prices

Surveyors are seeing a sizeable fall in property prices in Yorkshire and Humber while the South is seeing good growth, according to the Royal Institution of Chartered Surveyors (RICS).

The organisation said 18 per cent more surveyors are seeing price falls in Yorkshire and the Humber region than those seeing rises.

This compares with 22 per cent more surveyors seeing price rises across the country – the highest proportion since May 2007.

The Royal Institution said a lack of properties on the market is continuing to underpin the house price recovery.