Bellway boosted by strong consumer demand

Bellway said in an upbeat trading assessment that “robust consumer demand” for its new houses was behind a strong performance for the year.

The housebuilder said demand, boosted by mortgage availability and the government’s Help To Buy scheme, had helped it to achieve an average of 187 reservations a week, an increase of nearly 11% year-on-year.

“Demand since the general election has remained strong,” it said, “with customers’ appetite to purchase a new home so far unaffected by any uncertainty in the wider economy.”

Bellway said it had completed the sale of 9,644 new homes, up 10.6% on last year. The average selling price of homes sold rose by 2.9% to a record £260,000, “with this diluted by a higher proportion of lower value social housing completions, which represented almost 22% of the total, versus 16% last year”.

It had bought 11,613 plots of land, up 21.5%, during the year.

The firm, the UK’s fifth largest housebuilder by turnover, said it expected its housing revenues to rise by more than 13% to £2.5bn, with an operating margin to “rise to slightly in excess of 22%”, versus last year’s 22% figure.

Ted Ayres, Bellway’s chief executive, said: “A focus on delivering growth, set against a backdrop of favourable market conditions, has helped Bellway to surpass last year’s record in respect of both volume and operating margin and further increase the group’s contribution to the supply of much needed new homes. 

“This excellent trading performance, together with additional investment in attractive land opportunities, ensures that Bellway is well placed to continue its disciplined growth strategy.” 

Bellway did not mention the leaseholds issue in its trading update, although it has previously told Building that while it sold houses as leaseholds, it has not made use of controversial doubling ground rent charges that have been hitting the headlines in recent months.

The firm announces its full-year results on 17 October.