Bellway is increasing housing supply to satisfy strong customer demand as a surging UK property market provides a boost to the home builder’s full-year results.
The FTSE 250 company said on Friday in a pre-close trading update for the year ended July 31 that it experienced a 36 per cent jump in the value of its forward order book to a record £924.3m, compared with £679.5m last year.
It also reported significant volume growth with a 21.2 per cent increase in the number of housing completions to 6,851 from 5,652 last year.
Bellway said customer demand had remained strong throughout the year, supported by an “improving economic outlook and positive mortgage market conditions”.
The April announcement that the government’s Help to Buy shared equity loan scheme would be extended to March 2020 “should also help sustain demand”, according to the company.
Bellway’s statement follows strong data from building society Halifax, which this week reported that house prices were up 4 per cent on the month in July, increasing the annual rate of inflation to 10.2 per cent in the three months to July – the fastest since September 2007.
The Halifax data surprised the market, supporting the argument that the recent slowdown in the property market due to tighter lending requirements was only temporary.
Bellway said all geographic regions had performed well, especially the London boroughs, where significant land investment in recent years had helped the group complete the sale of 1,236 homes, compared with 865 last year.
Also, its new divisions, which opened in August last year in Manchester and the Thames Valley, were “gaining momentum”, delivering 98 and 101 completions respectively.
Bellway said the average selling price of homes in the year to July 31 increased 10 per cent to £213,000.
Keith Adey, finance director, said that while there was “upward pricing pressure”, Bellway felt its products were still “very affordable in the context of the London market”.
Ted Ayres, chief executive, said the company had between 25 and 30 sites in the “affordable end” of the London market such as east, northeast and southeast London.
Mr Ayres said with the strong growth in house prices in London over the past 12 to 18 months, the market was starting to see this price growth levelling off.
“We are not seeing prices going backwards. They are just starting to level off, and that is healthy for the market.”
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