MOTOR dealer Reg Vardy said the car buying market worsened this year, but its prospects remained good.

The Sunderland-based group said purchases by private buyers fell in the six months to October 31 as higher interest rates and concern about house prices took their toll.

Overall, new vehicle registrations declined by 2.9 per cent to 1,307,814 from 1,347,287 in the same period last year, with sales at the high end of the market particularly badly hit.

The fall was reflected in the company's half-year profits, which, at £24.8m, were only slightly higher than last year's £24.2m.

However, Vardy said its outlook remained strong based on its market position.

It said acquisitions made in the past two years would grow and contribute to the significantly higher margins in its core business, while property profits and growth from other activities, such as contract hire and fleet operations, would also play a role.

Reg Vardy has nearly 100 dealerships across the UK and sells most of the major brands, including specialist marques Aston Martin, Jaguar and Land Rover.

It also has a contract hire division that leases cars to companies on 36-month deals.

The first six months saw four dealerships added to the group, bringing the total to 95 compared with 82 at this time last year and the net number of dealerships acquired in the past two years to 28, representing a 42 per cent increase.

It bought two dealerships during the six months, including Hartlepool Vauxhall.

In October, Citroen awarded Vardy the Hartlepool and Stockton franchise.