Considerable uncertainty still surrounds the UK housing market, Bovis warned yesterday as it revealed it was unlikely to achieve expansion targets this year.
The Kent- based house builder, which employs 150 at its Central Operation in Coleshill, said it would only achieve its aim with a significant rise in orders during the autumn.
In a trading statement yesterday, ahead of its interim results in September, it said there had been no discernible improvement in deal activity in the market since the General Election.
Bovis said it still aimed to achieve about 3,150 legal completions in the full year and was well placed to build the homes needed.
But it added: "The current short term trading conditions are likely to impact the group's target for over 1,100 further home reservations, for 2005 legal completion, in the second half of the year.
"Unless there is a notable increase in reservation levels during the period August to October, it is unlikely that the group will achieve the planned level of volume expansion this year."
Bovis is focused on the South-east, South West and the Midlands, serving the lower-middle market and retirement sector.
Chief executive Malcolm Harris told The Birmingham Post: "The situation in the Midlands is much the same as the rest of the country. I would love to say the people of Birmingham are so dynamic and rich that they are going out and buying houses, but that's not the case.
"While we are seeing strong demand, and our total sales are only three per cent down, there is a minor crisis in confidence across the country.
"This is particularly affecting the second hand housing market, which is a difficult market at the moment. This is not affecting our our small and mid market properties, but people who want to sell their homes and move into one of our four or five bed detached properties are finding it more difficult. In the first six months of last year if you did not make a reservation for one of our houses on the first visit, you wouldn't be able to buy it. Now you would make three visits before buying it."
Mr Harris said confidence would return with a lowering of interest rates by the Bank of England.
He said: "If they came down a quarter or half of a base point that would restore consumer confidence, but prices would remain flat."
In March, the group said pretax profits had risen 18 per cent to a record £145.2 million in the year to December 31, in line with forecasts, due to interest rate stability since last summer.
Yesterday, it said the UK housing market had stayed steady in the second quarter of 2005 after a weak fourth quarter of 2004 and a quiet start to this year.
Bovis said consumers were showing caution, contributing to property deals in England and Wales in the first quarter of 2005 being 24 per cent lower than in the same period in
2004. The firm said it believed changes to accounting standards would reduce its interim pretax profits by more than £1 million.
It said its average selling price in the first six months was £ 179,800 against £201,100 a year ago.
Bovis said the average sale price for the full year 2005 would be lower than in 2004, largely due to the average size of unit which could fall by about ten per cent year on year.
The company said it believed its medium to long term prospects were good, founded on its land bank and ability to deliver needs-driven homes.
Bovis' shares closed down 36p at 654p.