Bovis Homes, one of Britain's biggest housebuilders, announced that it would scrap its interim dividend in 2009 amid more challenging trading conditions.

Bovis said that instead it would use the funds to take advantage of cheaper residential land by buying sites.

The FTSE-250 group reported signs of stabilisation in the housing market in the first half of 2009 compared with the previous six months, but like rivals Barratt, Redrow and Persimmon, Bovis cautioned that a lack of mortgage availability remained a constraint to recovery.

Bovis said 901 private customers had reserved properties during the six months since 1 January 2009, an increase of 92 per cent over the same period a year ago. It attributed the rise to a lack of supply in the second-hand home market that had caused buyers to consider new builds instead.

A statement from Longfield, the Kent-based group, warned that the total number of transactions remained low and prices remained “substantially below” the peak achieved in late 2007.

Its average sale price for its homes was £160,400, down from £196,700 in the first six months of 2008.

“House prices appear to be demonstrating a degree of stability at present, aided by the current low level of second hand homes being offered for sale across the housing market,” the company said.

The figures from Bovis echoed similar trading updates from two of Britain’s other big housebuilders this week.

Barratt Developments, the country’s largest developer, and Redrow, said they had seen evidence of price stability.

UK house prices have lost about a fifth of their value in the current downturn. Halifax, Britain’s biggest mortgage lender, said on Wednesday that UK house prices fell just 0.5 per cent during June — the slowest monthly pace for a year — against an annual decline of 12.5 per cent.

Bovis also said that it was focusing on clearing its stock of unsold homes and now has just 480 homes for sale around the country, after starting the year with 1,000 unsold properties.

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