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Bovis ups dividend as UK housing market booms

Monday, 24 Feb 2014 | 1:32 AM ET
We buy land all the time: Bovis Homes CEO
Monday, 24 Feb 2014 | 2:05 AM ET
David Ritchie, CEO of Bovis Homes, says the company will continue buying land until the market becomes overly competitive.

The CEO of U.K. housebuilder Bovis Homes has told CNBC the company saw a significant impact from rising house prices as it reported a profit hike of almost 50 percent.

The firm proposed a 2013 final dividend payment of 9.5 pence per share, bringing the total dividend for the year to 13.5 pence per share, an increase of 50 percent from last year.

Bovis's full-year profit before tax rose to 48 percent to £78.8 million ($131.1 million),at the upper end of analyst expectations as U.K. house prices – and those in London in particular - surged past their pre-financial crisis peak.

(Read more: Bubble alert? UK house prices rise to 6-year record)

A builder uses a saw as he works on the roof joists of a new residential home during construction.
Chris Ratcliffe | Bloomberg | Getty Images
A builder uses a saw as he works on the roof joists of a new residential home during construction.

CEO David Ritchie described the figures as "very pleasing" and said the level of growth had allowed the company to launch a number of new building sites.

"Suppliers and contractors are also taking advantage of a more buoyant market," he said, adding: "We are buying land all the time – our growth strategy allows us to buy more land then we can use."

(Read more: No UK housing bubble, just a London one: EY)

The housebuilder saw full-year revenue jump 31 percent to £556 million and operating profit margin up 14.9 percent in 2013 compared to 13.3 percent in 2012.

According to property website Rightmove's housing index, published last week, asking prices for U.K. houses jumped above £250,000 ($419,050) in February, up 6.9 percent on the same time last year.

This marked the highest annual increase for more than six years in a fervent U.K. property market. While all regions in the U.K. saw house prices go up, the latest rise has been driven by rapidly escalating prices in London and the south east of England, where house prices are up 11.2 percent and 7.8 percent respectively compared to the year before.

By CNBC's Jenny Cosgrave: Follow her on Twitter @jenny_cosgrave

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