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Bellway improves price guidance as UK property sector stabilises

Bellway has raised its sales price forecast on the back of increasing stability in the UK housing market.

The Newcastle-based developer now expects its properties to sell for an average of £305,000 this financial year, up from previous estimates 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 home completions during the last quarter.

Improved guidance: The Newcastle-based developer now expects its properties to sell for an average of £305,000 this financial year, not £295,000

In addition, the company revealed that its order book had expanded by around 21 per cent to 5,346 homes worth £1.45 billion since last August.

Trading improved during the recent spring selling season, supported by greater affordability which boosted customer confidence and booking levels.

From early February to June 2, the group’s weekly private booking rate rose to 152 from an average of 139 during the same period in 2023, rising 6.9 percent to 0.62 on a store basis.

The UK housebuilding sector started to gain momentum as mortgage rates fell slightly on expectations that the Bank of England will cut interest rates soon.

Jason Honeyman, the firm’s chief executive, said: «Bellway delivered a solid trading performance supported by improved affordability and seasonal growth during the spring».

He added: «We have been encouraged by continued healthy customer interest and, combined with the strength of our store opening programme, we continue to expect year-on-year order growth.»

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Bellway’s results come as Halifax Building Society figures showed UK house prices were flat at £288,688 in May, down 0.1 per cent on April but up 1.5 per cent on the previous year.

House prices have stabilized since the BoE’s 14 consecutive key rate hikes and a controversial «mini-budget» dampening mortgage demand.

Prices have also remained high due to restrictive planning laws and a lack of new public sector housing, creating a massive housing shortage.

Russ Mould, chief investment officer at AJ Bell, said the industry would be «hoping for a return to the trifecta of attractive supply and demand dynamics … government support and cheaper mortgages».

He added: «Investors will certainly be hoping for the same if the industry has the potential for a healthy period during 2010 that has allowed Bellway to distribute a lot of cash to shareholders.»

Bellway shares were up 0.65 per cent at £28 on Friday morning, having risen around 22 per cent over the past 12 months.

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