Bellway to hit sales milestone despite signs of cooling prices
The Newcastle-based builder said that, while pricing was generally ‘firm’, the rate of growth had eased back in 2018.
Bellway has said it is on track for a full-year sales milestone despite signs that Britain’s property market is faltering as it confirmed cooling price growth.
The Newcastle-based house-builder said that, while pricing was generally “firm”, the rate of growth had eased back in 2018.
It added that customer demand has been hit for large and higher value homes in certain areas, prompting the use of incentives to boost sales.
But the group said it was on track for “substantial” full-year earnings growth and record house sales of more than 10,000 in spite of the price pressure.
Bellway’s comments came as rival Crest Nicholson confirmed its profit margins are under pressure from stalling prices and rising build costs, with the squeeze set to continue into next year.
Crest reported a 2% fall in half-year profits to £74.8 million.
Shares in builders fell across the board, with Crest down 6% and Bellway off 3% in the FTSE 250 Index, while their FTSE 100 counterparts, Barratt Developments and Persimmon, were also in the red.
Recent house price surveys have confirmed the UK property market in general is struggling to gain traction.
But until now, the new-build market has remained the bright spot, thanks to Government support in the form of the Help to Buy initiative.
Bellway said that, although it is seeing stable market conditions, “the rate of increase has moderated compared to last year”.
“In certain areas, where affordability is a greater constraint, customer interest is less pronounced for particularly large or higher priced homes,” it added.
Despite this, Bellway is expecting to notch up record sales as it forecast growth of around 600 in the year to July 31.
Full-year earnings should also see solid growth as it also said its average selling price was set to rise to above £280,000 from just over £260,000 the previous year.
It said weekly sales reservations since February 1 rose to 233 from 221 in 2017, an increase of 5.4% from an average of 251 active outlets.