Profits for housebuilder Bovis are expected to drop again this year as the firm said it will build fewer homes to focus on improving quality of its properties
A focus on improving the quality of new builds will leave profits down, housebuilder Bovis has warned.
The firm has been under the spotlight recently after it was criticised by some buyers over the standards of its new homes. As a result the firm has pledged to put its attention on improving the quality of new builds, rather than delivering quantity.
In December Bovis said it expected its pre-tax profit to hit between £160 and £170m. This was revised today, when the housebuilder suggested this figure would drop three per cent to £155m. This was due to a £7m compensation package to fix quality issues in a number of new homes.
Focus on quality
Speaking to Reuters, interim Chief Executive Earl Sibley said: “Through the beginning of 2017, we’ve done a thorough review across the business to make sure we’ve captured those issues and captured the cost in 2016.
“We are extending some of our development programmes… to ensure that we do have sufficient time from the final certification that we get to deliver a quality home to our customers.”
Bovis reported it had built close to 4,000 homes last year. However, the housebuilder said it expects volumes will fall between 10 and 16 per cent during this year.
This will certainly have a knock-on effect on profits, which will undoubtedly drop to match the reduced number of new build properties the firm will complete.
New homes under the spotlight
Recently new builds have faced criticism. Earlier this month the Guardian reported that the NHBC, which provides warranties for new homes, was forcing homeowners to sign non-disclosure agreements to prevent speaking out about poor quality builds.
Bellway Homes also came under fire over issues relating to leasehold. Buyers were reportedly fed misinformation about the status of their property, which led to criticism of the housebuilder.