Saturday, August 13, 2022

Bellway posts record results amid record home completions

Housebuilder Bellway

It said that average sale price of its homes had risen to £303,206 and there was strong underlying demand in the housing market

Housebuilder Bellway has reinstated its interim dividend after completing a record number of homes in the first half of the year as sales.

The Newcastle company’s revenues came in at £1.7bn, a rise of 11.6% on the same period last year, though operating profit remained relatively flat at £297.7m.

Bellway said it expected to sell around 10,000 homes during the full year, a big rise in the 7,522 sold in the 12 months up to July 31 2020.

It said that average sale price of its homes had risen to £303,206 and there was strong underlying demand in the housing market. The company said it had made a “significant investment in land, with a record 8,848 plots contracted.”

But Bellway has also set aside a further £20m to deal with legacy issues relating to cladding on apartment blocks in the aftermath of the Grenfell disaster. That took the amount set aside by the company to £131.6m, though £91.6m of that remains unused.

An interim dividend of 35p per share has been reinstated, having been cancelled last year.

Chief executive Jason Honeyman said: The fundamentals of the housing market remain robust, with an underlying requirement for new homes in the UK.

Affordability is good, supported by an ongoing environment of low interest rates and the mortgage market is broadly supportive, although deposit requirements generally remain high, outside of the Government’s Help-to-Buy scheme, Honeyman said.

He said that the continuation of this scheme, albeit with the introduction of regional price caps from April 2021, together with the temporary and extended stamp duty holiday are both welcome, providing important support to the housing market and especially those looking to make their first step onto the housing ladder.

Bellway is also hopeful that the Government’s new mortgage guarantee scheme will lead to the return of competitive, long-term, higher loan-to-value mortgages for both the new build sector and the wider market, Honeyman said.

He said: If successful, this will underpin ongoing customer demand, while helping the sector to increase the much-needed supply of new homes. In doing so, it will promote a stable and sustainable housing market.

Bellway revealed that it had retained its status as a five-star housebuilder for the fifth consecutive year, and that it had a ‘robust’ forward order book of £1.6bn.

It said the market was strongest for affordably priced homes in areas such as Manchester, the Midlands, Essex and the Home Counties.


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