Hi °C | Lo °C Housebuilder Bellway today said it had seen some stability in house prices, but warned of a divide emerging in the market's return to health.
The group said its UK southern divisions had experienced a marginally stronger market and turnover was expected to be “much higher” by the end of the year than in the North.
Newcastle-based Bellway said markets in the Midlands, Yorkshire and North West England remain “fragile”.
The firm said incentive schemes such as cash discounting, part exchange and shared equity were still widely used but were not on the increase, lending continuity to prices.
Bellway said it would now look to begin buying land suitable for traditional two-storey housing.
“The focus of the business is changing from one of simple debt reduction to selectively increasing production in certain parts of the country where demand is strongest,” the group said.
Bellway's statement comes as positive news on the housing market is increasing.
Bellway said reservations since February 1 had continued to average 105 a week, which the firm said would secure its target of 4,200 homes sales this year and underpin its performance.
But the firm warned of historically high cancellation rates as prospective buyers struggled to get mortgages and lenders' valuations were “inconsistent”.
Bellway said: “The summer selling season normally heralds a slow down in activity and selling homes in the early stages of construction is difficult, given the current lending environment.”
But it said its current order book of reservations for completion after July 31 — the beginning of the next financial year for the firm — stands at £228m, compared to £283m at the end of last year, with a further nine weeks of selling to go. Bellway aims to have 50% of next year's volume target secured as it enters the new financial year.
The group revealed in March that average property prices slumped 11% to £156,100 in the first half, while it sold 2,014 homes against more than 3,250 a year ago.
