Housebuilder Bellway makes record land investment as house prices rocket
Bellway has made a record investment in land since last August, a move that could pay off handsomely in the future with the recent rise in house prices.
The housebuilder has contracted to acquire some 15,982 plots since 1 August 2020, up from 10,079 plots in its 2020 financial year, and 10,620 in 2019.
Bellway said the value of its most recently bought plots is a record £891m, up from £651m and £631 in 2020 and 2019 respectively, and that the average gross margin, based upon revenue and cost at the time of the acquisition, is around 23 per cent.
At the same time, house prices in the UK have soared, largely fuelled by the stamp duty holiday.
As a result, the selling price of Bellway’s approximately 10,000 homes to be completed this year is expected to be in excess of £300,000, up from £293,054 as at 31 July 2020.
Chief executive Jason Honeyman said: “Demand for our high-quality new homes continues to be strong and customer confidence throughout the wider housing market is resilient.
“We have continued our front-footed approach to land acquisition, making a record investment in new sites, thereby enabling us to grow sales outlets and meet the ongoing demand for new homes in the years ahead.
“This disciplined investment approach, together with our strong balance sheet, ensures that Bellway is in a good position to continue its long-term growth strategy.”
Since 1 February, Bellway has seen 239 property reservations per week, up from 158 for the same period in 2020, but down from the 244 achieved in 2019 pre-pandemic.