Bellway interims highlight housing’s struggles

Half-year results posted by the Newcastle-headquartered homebuilder show both housing completions and revenue down by almost 30% year-on-year, while pre-tax profit dropped by 62% to £117m.

Bellway also had cause to dip into its reserves, with the net cash position  at 31 January this us year being £76.6m, down from £292.5m a year earlier.

However, group chief executive Jason Honeyman said that the recent easing of conditions around mortgage interest rates is giving cause for optimism.

Honeyman said: “Bellway has delivered another resilient performance in a period of challenging trading conditions. Although the economic backdrop remains uncertain, the gradual reduction in mortgage interest rates throughout the first half has helped to ease affordability constraints and we have been encouraged by the improvement in reservations since the start of the new calendar year.

“The Group remains on track to deliver volume output of around 7,500 homes in the full financial year and, if market conditions remain stable, we are well-placed to build the order book through the second half which will serve as a platform for a return to growth in financial year 2025.”

That volume of completions would be down from 31 July 2023’s figure of 10,945 homes. As with other housebuilders and property companies posting results recently, including Persimmon, Bellway remains of the view that the fundamental issue of under-supply in the UK market will see it recover well.

Honeyman concluded: “Overall, the long-term fundamentals of the UK housebuilding industry remain attractive, given the shortage of energy efficient and affordable homes across the country.

“We remain confident that the Group’s robust balance sheet and operational strength, combined with the depth and quality of our land bank, will enable Bellway to successfully navigate changing market conditions and capitalise on future growth opportunities.”

Bellway said that in the six weeks since the reporting period, reservation rates have steadily climbed, while headline prices are holding up.

Projects in the region Bellway is working on include the 130-home Wellfield Rise in Wingate, County Durham; Modello in Gateshead, where a former rail yard is being developed with 98 homes; and the massive Killingworth Moor scheme, where Bellway and Banks are looking to advance 500 homes and employment space in a major long-term project.