"Bellway claimed an encouraging trading performance but remained mindful that the uncertainty over interest rates and cost of living effects “could impact housing demand”"
In its latest trading update covering February to June, Bellway reported that its spring selling season was encouraging since the challenging fourth quarter of 2022. However, despite this, the average private weekly reservation rate dropped to 139 from last year’s 198.
Subsequently, the lower reservation rates seen during the period impacted the forward order book, which dropped to £1,710 million compared to 2022’s £2,404 million - Bellway noted this was still “sizeable”.
Reiterating previous guidance, the firm said it was on track for full-year volume output of 11,000 homes for its year ending July 31, 2023, against FY 2022’s 11,198. Its overall average selling price is anticipated to be around £300,000, slightly down on 2022’s £314,399.
Bellway claimed an encouraging trading performance but remained mindful that the uncertainty over interest rates and cost of living effects “could impact housing demand”.
The housebuilder also noted reduced mortgage product availability in the short term, with lenders responding to interest rate changes. It also said the withdrawal of Help to Buy had triggered lower year-on-year demand from first-time buyers.
Looking ahead, Bellway said it expected volume output to also be lower in FY2024, given the profile of completions in the coming months and prevailing reservation rates which were likely to lead to a further decrease in the order book by FY 2023.
Jason Honeyman, Bellway’s group CEO, said: "Bellway has delivered an encouraging trading performance, buoyed by a seasonal uplift through the spring.
“Bellway’s experienced teams, strong balance sheet and high-quality landbank position the group well to successfully navigate changing market conditions and continue to play an important role in increasing housing supply in the years ahead".