(Reuters) - Britain's McCarthy & Stone (L:MCS) said it expected modest growth in the next two years due to a decline in land exchanges and planning consents in the half-year, following a government proposal to set ground rents.
The British government proposed last July that builders be banned from selling leasehold homes in England and ground rents on flats could be cut to zero, responding to public criticism about price hikes facing leaseholders.
The U.K.'s biggest builder of homes for retirees said it was cautious in its response to the uncertainty resulting from the proposal and attained 22 land exchanges and 21 planning consents in the six months period to Feb. 28, down from 30 land exchanges and 34 planning consents in the prior year.
The company said it was working with the government to seek an exemption from the changes on grounds of unique viability model of retirement housing.
Revenue for the period rose 1 percent to 239.6 million pounds with the average selling price climbing 15 percent.
However, lower level of completions and inflationary build cost increases dragged underlying operating profit 40 percent lower to 14.5 million pounds.
The company said current trading remains 'resilient' despite a subdued secondary market and forward sales including legal completions were 13 percent ahead of the prior year at April 6.