TULLOCH has become the latest housebuilder to offer special financial deals to customers in an effort to overcome a credit crunch-induced slowdown.
The Inverness-based firm has established a dedicated pot of mortgage funding to help homeowners until they are able to sell their own property.
Tulloch's move, revealed as it today publishes its accounts for last year, comes amid reports of plan
s being drawn up in the City to reinforce the balance sheets of a number of under-pressure housebuilders.
Addressing the effect of the credit crunch, Tulloch yesterday said that, in certain cases, it will accept a customer's previous home as a "trade in" for one of its properties.
Chairman David Sutherland said that demand from customers for new homes appeared to have increased over the past year, but sales have slowed because of mortgage availability.
"Sales are not running at the same rate as last year, that's for sure, but the footfall tells me that customers are still looking to move; it's the barriers to getting a mortgage, and what they do with their own house, that's stopping that."
As well as the three-year fixed rate mortgages, Tulloch is offering to pay estate agents fees for some its customers to sell their own homes "to get them over the line", Sutherland said.
While Tulloch is not disclosing the backers of the mortgage scheme, Bank of Scotland recently bought a 40 per cent stake in the company.
In its accounts for 2007, Tulloch shows operating profits have increased by £9.5 million to £15.85m, as turnover rose by 10 per cent to £94.2m.
Pre-tax profit fell by almost £22m to £10.7m. However, the previous year included a £27m gain from the sale of its construction business to Rok.
Sutherland also took a substantial pay cut, with a salary and bonuses of £1.5m, down from £4.8m in 2006.
The Tulloch moves come after a week in which shares in Britain's listed housebuilding sector crashed amid fears that a fall in sales and asset write-downs would cause covenant breaches.
Barratt Developments was forced to issue a statement last week insisting it was within its debt terms. Yesterday it was reported that banks have drawn up plans to place cash with major housebuilders, possibly including Taylor Wimpey and Barratt.
Instead of the companies opting for a risky rights issue, the money would come from current investors in an effort to bolster their clients' fortunes.
It was also reported yesterday that retirement specialist McCarthy & Stone had called in bankers NM Rothschild to restructure its debt. The company has apparently held meetings with shareholders, including Scotland's richest man, Sir Tom Hunter, and Bank of Scotland Corporate, to discuss ways to prevent breaches of its banking covenants.
A spokesman for West Coast Capital, Hunter's investment firm, was unmoved, saying: "We are very confident in (McCarthy & Stone's] management and a totally committed shareholder."
The full article contains 498 words and appears in The Scotsman newspaper.
