Bellway to beat forecasts after spring surge

Housebuilder Bellway has said that it will beat profit forecasts on the back of a strong start to the spring selling season.

Announcing interim results for the half year to 31 January, with profits up 26% to £24m, the company said that it now expected to increase the number of homes sold in the full year by 5% on 2010. Last autumn it said a good result would be to match 2010’s sales.

Alistair Leitch, Bellway’s finance director, said: “The highlight is that we’re seeing a return to the traditional spring selling pattern. Around October last year we were concerned it wouldn’t happen, but since January we’ve seen an increase.

“It looks like people have taken stock of where they are in their jobs, and those that have got reassurance are pressing ahead with purchasing. For all buyers apart from first-time buyers the market’s quite good at the moment, with low mortgage rates.”

Leitch said the 5% increase on last year in home sales would bring with it a “consequent increase in profits.”

The number of sales per site per week has increased from 0.43 between August and January, to almost 0.6 since then. Bellway is now operating at 200 sites, and plans to bring 10 to the market in the next few weeks.

Bellway sold 2,332 homes in the first six months of the financial year, up 4% on 2010, generating turnover of £408m, an increase of 13%.

Howard Dawe, Bellway chairman, said that buyers were still nervous, but said that the market was better now than it had been portrayed in the press.

“There is no doubt that the housing market stuttered through the autumn of 2010 and that the inclement weather prior to Christmas had a negative effect on reservation levels.

“Since the start of 2011, however, visitors and reservations have returned to the pattern of a traditional spring market, despite a media backdrop of negativity,” he said.
Leitch also welcomed the chancellor’s announcement of a £250m shared equity scheme to help first-time buyers purchase new-build homes.

He said that the government announcement could provide a boost to income in the next financial year, with Bellway having sold 800 homes through Labour’s New Build
HomeBuy scheme.