Bellway warns of sluggish start to year

Bellway has warned the spring selling this year will not see a return to normality for the housing market.

In a trading update this morning for the six months to 31 January, the north-east based firm said first-time buyers were still hamstrung by mortgages that required high levels of deposits.

It said: “We expect trading conditions during the first half of 2010 to be subdued relative to historic levels.”

Charlie Campbell, analyst at Liberum Capital, said: “Caution on spring selling season will be taken badly by nervous stock market.”

Completions over the half-year were 2,247 (2009: 2,014) while the average selling price was £156,000 (£156,146). The operating margin was about 6% (9.2% before exceptional items)

Reservations averaged 85 per week compared to 65 in the same period last year and 104 from February to July 2009.

Bellway ended the period with net cash of £61m and since August has spent £76m on land, predominantly in the south, and has terms agreed on a further £123m.

The statement added: “The group is currently well positioned and is trading profitably with a high level of targeted output already secured and no borrowings. This should enable Bellway to take advantage of opportunities as and when they arise.”