North East housebuilder Bellway says its forward order book remains “substantial” but believes sales will remain “severely constrained” until lockdown restrictions are eased.
The Newcastle firm said it has 6,038 homes on the books, worth £1.568bn – a fall of 4% from a year earlier – but completions dropped 12% to 6,721 between August 1 and May 31.
Weekly home reservations fell by almost 70% in the 10 weeks to May 31, with the net reservation rate plummeted to an average of 71 homes, down from 231 a week a year ago.
But it said pricing has remained firm and that it is seeing a gradual pick-up in customer interest, having opened all its sales outlets in England since June 1, following an initial trial launched on May 18.
Bellway joined rivals in shutting construction sites, show homes and sales centres following the lockdown, even though construction was allowed to continue throughout. The housing market also ground to a halt as people were told not to move where possible.
Bellway has also restarted building work on around 230 sites, focusing on homes in the latter stages of production, but says that sales activity will be “severely constrained” until lockdown restrictions are lifted further.
To enable safe social distancing, work started initially with only one tradesperson operating in a home at any given time. But to speed up construction rates over the coming weeks, further working practices should mean more than one tradesperson can work in a home at the same time, on separate floors.
Bellway has maintained a telephone and online sales presence since the start of the crisis but its sales offices reopened in England on June 1, though viewings are limited to single family groups and are on an appointment only basis to keep customers and staff safe.
Most Read
The group furloughed around 75% of its workforce, all of whom have been paid full basic salary throughout April and May and, although eligible, Bellway has not applied for a grant using the CJRS and said it currently does not intend to. It has secured eligibility for a Covid-19 corporate loan through the Bank of England, but has not yet had to draw down on it.
The company said its balance sheet remains strong, with net bank debt of only £157m as of May 31, down from last year’s £261m, with committed bank facilities of £545m.
Chief executive Jason Honeyman said: “Our priority remains the health, safety and wellbeing of our colleagues, customers and subcontractor workers.
“With this in mind and following updated Government guidance with regards to restarting the housing market, we have carefully and gradually recommenced onsite construction and sales activity in England and Wales, whilst introducing strict social distancing requirements.
“This measured approach has enabled us to continue serving our customers and has facilitated the safe return to work for many of our employees.”
Meanwhile, work as also resumed on the new 21,000sq ft, multimillion-pound headquarters for Bellway at AirView Park, the new business park next to Newcastle International Airport.
Construction work, being carried out by Bowmer and Kirkland, was already at an advanced stage when lockdown measures were first enforced.
Don’t miss
Following the introduction of new social distancing guidelines, work has restarted and entered the final phase of construction, putting the 海角视频 housebuilder on track to becoming the first anchor tenant of AirView Park.
Tynexe Commercial Ltd, the property development company behind AirView Park, has welcomed the move and is confident that other companies will now follow the national home builder onto the 175,000 sq ft site in the near future.
The park, on the outskirts of Newcastle at Woolsington, has planning permission for up to four more office buildings or one 150,000 sq ft property.