Housebuilder Bellway has reported a "robust" spring selling season with renewed demand and resulting sales.
The FTSE250 builder said affordability had improved for house hunters, leading to increased confidence across the four months between the beginning of February and start of June. It meant a 5.9% boost to the company's private reservation rate to an average of 161 per week, up from 152 in the same period last year.
Bellway now expects to finish between 8,600-8,700 homes this year having previously said it was heading for 8,500. The overall reservation rate, including social homes, rose by 2.1% to 196 per week and the cancellation rate was consistent at 11%.
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Underlying operating margin at the Newcastle-based business is also expected to reach about 11%, having been 10% in 2024.
Forward orders were up by 7.7% to more than 5,750 homes at the beginning of June, compared with 5,346 at the same time last year. Bosses said they expect to continue a year-on-year increase in the forward order book at the end of July.
Average selling price is also expected to rise to about £315,000, from £307,909 in 2024. That represents an upgrade from £310,000 previously offered, which was said to be due to changes in the type of properties hitting the market and a group of relatively high value private completions in the final quarter of the financial year.
Bellway group chief executive Jason Honeyman said a healthy forward order book and site opening programme would support further growth in the 2026 financial year, and that he was confident in the group's land bank and focus on cash generation and efficiencies.
In a trading update, the firm said: "Bellway has a strong outlet opening programme and a healthy forward order book and work-in-progress position and, if market conditions remain stable, we are well-positioned to deliver cumulative volume growth of 20% in the two years to July 31, 2026. The board is confident that, given the strength of the group's land bank and balance sheet, Bellway is in a strong position to deliver continued volume growth into the longer term.
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"As outlined at our interim results in March, Bellway is focused on increasing return on capital employed and running a more efficient balance sheet. Our reaffirmed approach to driving greater cash generation and capital efficiency alongside growing volume leaves us well-placed to deliver multi-year growth in both asset turn and margin to deliver a sustained recovery in returns and ongoing value creation for shareholders.
"We look forward to providing a fuller update on our capital allocation plans later in the calendar year."
Housebuilders like Bellway have been bouncing back this year after a difficult period that saw volumes slump in the face of higher mortgage rates and the ending of Government help-to-buy schemes. The Labour Government's aim of increasing the number of homes being built has been welcomed by the construction sector.
Facing questions yesterday about whether the Government could meet a target of building 1.5m homes in this Parliament, Deputy Prime Minister Angela Rayner said: “We said that planning reforms alone won’t deliver our ambitions, which is why we’ve committed to delivering the biggest increase in social and affordable house building in a generation. I say to (Shadow Housing Minister Paul Holmes), like I said to many people in my life, underestimate me at your peril.”