'Encouraging start' for Bellway amid robust demand for new homes
Housebuilder Bellway has cheered a resilient property market in the face of Brexit uncertainty despite predicting a slowdown in sales growth.
The Newcastle-based group said it expects housing completions to rise by around 5% in the year to the end of July 2017, which would mark a fall on the near-13% hike posted in the previous year.
But it said customer demand for new homes was strong as sales reservations rose 7% to an average of 176 a week for the first 18 weeks of its new financial year and the group has resumed land buying after putting purchases on hold around the EU referendum.
Bellway chief executive Ted Ayres said: "The group has made an encouraging start to the financial year and customer demand for new homes continues to be robust."
The group added that it expects to deliver the 5% rise in house sales, "assuming customer confidence is maintained and there follows the usual seasonal rise in demand throughout the forthcoming spring selling season".
Shares rose nearly 3% after the update.
The group said site visitor numbers and hits to the group's website were both ahead of last year, while its cancellation rate stood at 11%, edging up slightly on the 10% rate seen a year earlier.
It said sale prices were firm across its regions and was "stable and robust" in London, where it focuses on affordable homes and has been shielded from a tough market for high-end properties.
An interest rate cut to 0.25% in August and moves by the Bank of England to bolster borrowing following the vote to quit the EU has helped support the housing market, according to Bellway.
The Government's Help to Buy equity loan scheme for first-time buyers has also continued to buoy the sector, with 37% of reservations made through the initiative.
Bellway said the move to restart land-buying has seen the group agree to snap up 40 new sites to develop and spend £263 million on land and land creditors.