- Reservations per outlet up
- Average selling price higher
- Fully sold for current year
FTSE 250 housebuilder Bellway (BWY) cited improved affordability as providing support for a rise in confidence among property buyers and a subsequent increase in reservation rates between February and June compared to the first half of its financial year.
The shares, which have gained 23% in the last year but are still some way below their pre-pandemic high, added 46p or 1.6% to £28.28.
RISING VOLUMES AND PRICES
The Newcastle-based developer reported an increase in private reservations per week to 0.62 against 0.58 in the same selling period last year, even allowing for a small increase in the number of outlets.
As a result, the forward order book increased from 4,411 at the start of the financial year to 5,346 at the start of this month, putting the firm on track to deliver its full-year target of 7,500 new homes.
In addition to rising volumes, the average selling price is now expected to be around £305,000 rather than £295,000 as originally planned due to an improved product mix.
With its projected build for this financial year now fully sold and a healthy order book, the firm is ‘well-positioned to return to growth’ in the coming financial year.
Meanwhile, the headwinds which impacted the housebuilding sector last year and the year before – namely shortages of materials and subcontractors – have largely abated meaning cost pressures are ‘far less pronounced’ than previously.
WHAT DID THE CEO SAY?
‘Bellway has delivered a solid trading performance supported by improved affordability and a seasonal uplift through the spring’, commented chief executive Jason Honeyman.
He added: ‘We have been encouraged by ongoing healthy levels of customer interest and combined with the strength of our outlet opening programme, we continue to expect a year-on-year increase in the forward order book at 31 July 2024.’
‘The outlook is improving and there is cross-party political support for increasing the supply of housing across the country. The long-term housing market fundamentals remain positive, and we are hopeful these will be bolstered by greater clarity over planning and housing policy beyond the upcoming General Election.’
