Bellway reservations jump 7%

FTSE 250 housebuilder Bellway reported a 7% jump in reservations in the 18-week period to 4 December and said it expects housing completions for the year to the end of July 2017 to rise by 5%.

The reservation rate increased to 176 per week from 165 as the company opened 46 new trading outlets.

Bellway said customer interest is strong, with site visitor numbers and hits to the website both ahead of last year. Meanwhile, the cancellation rate remains low at just 11% versus 10% in 2015.

The housebuilder said a competitive mortgage market and the recent reduction in the Bank of England base rate has helped to ensure that buying a new home is still affordable. In addition, the government’s Help to Buy scheme, which has been used in 37% of reservations versus 29% a year ago, remains an important initiative.

Bellway said the pricing environment is firm across the country in those areas where the group has a presence, with sales prices achieved on reservations in line with expectations. In London, where Bellway’s focus continues to be on affordably priced new homes, prices have remained stable and demand is robust.

Chief executive Ted Ayres said: “The group has made an encouraging start to the financial year and customer demand for new homes continues to be robust. The strength of the underlying housing market supports further growth and this, together with Bellway’s strong balance sheet and significant operational capacity, ensures that the group is well positioned to continue its disciplined growth strategy.”

Bellway said that while it remains mindful of the longer-term uncertainty brought about by the UK’s vote to leave the European Union, the positive autumn trading performance has given it confidence to cautiously recommence its land acquisition programme following a brief planned hiatus after the referendum.