Bovis raises cash for land

Bovis Homes today launched a £60 million fundraiser to give it firepower to snap up land for building new homes.

The housebuilder is selling 12.1 million new shares to raise the funds in a major show of confidence in the property market.

"Bovis Homes is well positioned within the house building sector to take advantage of an increasing number of short- to medium-term opportunities and to invest in residential land assets," the firm said in a statement.

Many builders stopped buying land and refused to start new developments last year as the housing market crashed, with prices tumbling and demand among buyers evaporating.

However, the market has now started to stabilise and buyers are returning to the market, lured by lower prices and cheap mortgages.

It has prompted firms such as Bovis to start snapping up land so it can build homes in time for the expected upturn in the property market.

Bovis is placing the shares in the market through Deutsche Bank and RBS Hoare Govett with investors snapping them up at around 500p each.

Bovis shares peaked at 1204p in April 2007 but sank as low as 270p in October last year.

They rallied from a 2009 low of 356p in June to 556p last month on signs of recovery in the housing market.

The shares were down 4.5p to 502p today.