Newcastle-based housebuilder Bellway has reported a rise in sales and profits but is urging the Government to do more to support the housing market. The company's trading update reveals operating profit is expected to rise to £320m, with housing completions increasing from 8,749 to 9,695 in the year to the end of July. Despite this growth, Bellway highlights ongoing challenges including mortgage affordability, economic uncertainty, and rising costs for builders.
Call for Government Action
Chief executive Jason Honeyman said action is needed to reinvigorate the housing market and help potential new homeowners. He specifically pointed to reductions in stamp duty as a way to boost house sales. Bellway also reported that it outperformed expectations on the number of houses sold, with the average selling price rising slightly to £324,000.
Mr Honeyman stated: “Bellway has delivered a robust performance and growth in volume output, despite ongoing headwinds for our industry. Our sharp focus on operational improvement and drive for capital efficiency has provided resilience and supported a strong increase in cash generation and shareholder returns.”
Market Challenges and Demand
Bellway noted positive trading in the early part of the spring selling season, but has seen a “moderation” in customer demand since April due to an uptick in mortgage rates. The company also reported a slight fall in private reservation rates. In response, Bellway said it will continue to exercise tight cost controls while the housing market remains subdued.
The company emphasized its focus on monetising its well-invested land bank and work-in-progress position to support improvements in asset turn and cash generation. Bellway also expects to complete a £150m share buyback scheme this month and will launch a further scheme to buy another £50m of shares.
Future Outlook
Mr Honeyman added: “The board remains confident that, with supportive market conditions, Bellway is in a strong position to capitalise on future growth opportunities. However, with the near-term outlook remaining uncertain, we call on the Government to act now to improve access to housing across all tenures, both by helping first-time buyers onto the property ladder and supporting the delivery of affordable and social housing for those who need it most.”
He concluded: “In order to ease affordability constraints and stimulate demand, an immediate reduction in stamp duty alongside a Government-backed deposit support scheme for first-time buyers would both drive economic growth and accelerate the delivery of much-needed new homes across the country.”
