Bellway on track after strong spring selling period but uncertain rate environment poses challenges
FTSE 250 Bellway is on track to meet its guidance for the full year after a strong spring selling season even as sales remain well below last year.
From the beginning of February to 4 June, the reservation rate averaged 190 homes per week compared to 253 in the same period last year, a fall of nearly a quarter.
However, the Newcastle-headquartered property developer said it had seen a “sustained improvement” in sales compared to the final quarter of 2022.
Bellway noted there was a week-on-week improvement in private reservations during January and February. Those have since been maintained throughout an “encouraging spring selling season.”
Pricing had “remained firm across our regions” although it had used “targeted incentives” in some areas to attract customers.
This meant that despite the fall on last year, Bellway is on track to complete around 11,000 homes with an overall selling price of around £300,000 when its year ends at the end of July.
Last year it managed 11,198 homes at an average value of £314,399.
But into 2024 Bellway expects lower sales year-on-year as a result of the reduced order book and the uncertain interest rate environment.
The order book stands at £1.7bn, nearly 6,200 homes, compared to £2.4bn last year and Bellway said it anticipates a further decrease by the end of July.
Jason Honeyman, chief executive, commented: “Bellway has delivered an encouraging trading performance, buoyed by a seasonal uplift through the spring, and the group is on track to deliver full year volume output of around 11,000 homes.
“While customer interest is currently healthy, the board remains mindful that cost of living pressures and the uncertain path of future interest rates could impact housing demand,” he continued.