Bellway is confident it will return to growth in the 2025 financial year after sales rates picked up in early 2024, which were helped by improving affordability.
The group released a trading statement for the period 1 February to 2 June 2024 on Friday, revealing a 6.9% increase in the private reservation rate per outlet per week.
Bellway reiterated completion guidance of 7,500 homes in the full year. This is substantially below the 10,945 homes completed in the last year, but Bellway has suggested that this will form a base for growth in 2025.
Overall average selling price is now anticipated to be around £305,000 in 2024, a welcome increase from £295,000 in the las year, due to a change in its product mix.
“Bellway bosses expect the housebuilder to return to growth in 2025 and this morning’s trading update indicates that target is just about on track. The UK housebuilder recorded stronger trading through the spring selling season as customer confidence looks to be creeping back up in the housing market,” said Mark Crouch, analyst at investment platform eToro.
Bellway’s statement was released as Halifax said UK average house prices fell 0.1% in the month to May, rising 0.1% in April. There has been a stronger start to the year for the housing market, but concerns about high interest rates will be slow to diminish, and we now have the uncertainty of what measures Labour will take should they win the election.
“The company and its peers will be hoping for a return to the trifecta of attractive supply and demand dynamics (likely given housebuilding volumes have dropped markedly of late), state support and cheaper mortgages,” said AJ Bell investment director Russ Mould.
“Investors will certainly hope for the same given a healthy period for the industry through the course of the 2010s enabled Bellway to dole out plenty of cash to shareholders.
“The Halifax house price index reading was a mixed bag – on a year-on-year view it was encouraging and came in ahead of expectations but month-on-month prices are largely static. However, after a rollercoaster ride coming out of the pandemic a steady period may be just what the market needs. There will be hope for an interest rate cut from the Bank of England sooner rather than later, too.”
