New build, high expectations

The 9p drop in Wilson Bowden's share price early this morning reflected a pervading uncertainty about the housing market outlook for next year.

Although the group says its order book is strong, affordability problems - coupled with possible further interest rate rises - are likely to take their toll on demand, particularly from first-time buyers, who are the target market for many of the new-build developments shooting up around the country.

New-build property, which, historically, is overvalued because of the large "discount" frequently applied to entice buyers, looks like a precarious investment in a stagnant property market.

Although it expects profits "in line" with expectations, Wilson Bowden has already seen a fall in average selling prices this year.

The Government-led quest to increase the supply of new housing should keep the builder busy, but it remains to be seen whether it will be able to sustain the strength of its order book in a market that is losing momentum as buyers lose their faith.