- Bellway now expects its properties to sell for an average of £305,000 this year
- The company said the improved outlook was due to “product mix changes.”
Bellway has raised its sales price forecast thanks to increasing stability across the UK property market.
The Newcastle-based developer now expects its properties to sell for an average of £305,000 this financial year, up from a previous forecast of £295,000, although this new figure is still lower than the £310,306 achieved last year.
He told investors the improved outlook was due to “changes in the product mix”, including some “relatively high value” private housing completions during the latest quarter.
Improved guidance: The Newcastle-based developer now expects its properties to sell for an average of £305,000 this financial year instead of £295,000.
In addition to this, the company revealed that its forward order book had expanded by approximately 21 per cent since last August to 5,346 homes worth £1.45 billion.
Trading improved during the recent spring selling season, supported by increased affordability that increased customer confidence and booking levels.
Between early February and June 2, the group’s weekly private booking rate increased from an average of 139 during the same period in 2023 to 152, while growing 6.9 percent to 0.62 per establishment.
The UK housebuilding sector has started to gain momentum as mortgage rates have moderated slightly on expectations that the Bank of England will soon cut interest rates.
Jason Honeyman, the company’s chief executive, said: “Bellway delivered strong business performance supported by increased affordability and seasonal growth during the spring.”
He added: “We are encouraged by the continued healthy levels of customer interest and, combined with the strength of our outlet opening programme, we continue to expect a year-on-year increase in the forward order book.”
Bellway’s results come as figures from Halifax Building Society showed UK house prices held steady at £288,688 in May, down 0.1 per cent on April but up 1.5 per cent. percent compared to the previous year.
House prices have stabilized since the Bank of England’s 14 successive base rate hikes and the controversial “mini budget” which curbed demand for mortgages.
Prices have also remained high due to restrictive planning laws and a lack of new housing construction in the public sector, which has created a huge housing shortage.
Russ Mould, chief investment officer at AJ Bell, said the industry would “expect a return to the trifecta of attractive supply and demand dynamics… government support and cheaper mortgages”.
He added: “Investors will certainly expect the same given that a healthy period for the industry throughout the 2010s allowed Bellway to distribute plenty of cash to shareholders.”
Bellway Stock They rose 0.65 per cent to £28 on Friday morning and have grown around 22 per cent in the last 12 months.
