British home builders are warning that 2011 will not be a banner year. Due to low consumer confidence, public spending cuts by government and higher VAT, almost all industries will be hit hard in 2011. The housing industry is having a difficult beginning to the new year. Potential home buyers are finding it difficult to obtain lending, and acquire the needed deposit, leaving many homes on the market without buyers.

"Mortgage approval volumers remain weak, with mortgage providers requiring high levels of deposit, particularly for first-time buyers," reported Bovis Homes in a statement.

Bovis Homes, a British homebuilder, expects 2010 profit to be ahead of consensus estimates given at 16.3 million pounds. They reported that they expect to pay dividends for 2010 in May. Bovis shares, since reporting a sales rate increase in November, have seen shares go up by more than 20%.

The company’s sales orders for 2011 delivery are at 420 homes. In 2010, Bovis completed 1,901 homes, which was an increase over 2009's 1,803 homes. Average sales prices went up to 160,700 pounds which was a 4% increase.

Recently, mortgage provider Halifax released data showing British house prices fell at their fastest annual rate in more than a year in December.

Though mortgage applications dropped in the final months of 2010, remortgage saw a surge. Countrywide, UK’s largest property service, reported that in November the number of remortgages had increased 24%. Remortgages made up 29% of all mortgage applications of Countrywide customers in November.

With lending constrictions and difficulty in obtaining deposits, the current economic climate is probably going to be a very slow market for house purchasing. However, buy-to-let properties are set to see an increase in demand as consumers seek out rental homes, since home ownership is out of reach for many.