Bellway expects strong annual earnings growth

The FTSE 250 company expects to sell about 600 more homes in the year to the end of July than in the year before, it said in a trading update. Reservations at 233 a week were up 5.4% in the four months to 3 June despite extreme winter weather in March and this year’s average selling price will be more than £280,000.

Bellway’s order book is 7.8% higher than a year ago at £1.703bn and market conditions are good, the company said. Spending on new land since August has increased to £678m from £586m a year earlier.

Sales of new-build homes have remained strong even as the wider housing market has stalled, leading to a boom time for housebuilders like Bellway. The industry’s critics say its success is propped up by the government’s Help to Buy programme, which underwrites mortgages for buyers of new homes.

Bellway said pricing was firm though the rate of increase, at low single digits, was lower than last year. In areas where house prices are particularly high there is less customer interest for large or pricey homes.

John Watson, Bellway’s chief executive, said: “This has been another successful trading period for Bellway, in which the demand for new build homes remained strong … For the full year, Bellway is on target to complete the sale of in excess of 10,000 homes for the first time in its history and, in doing so, achieve another record year of earnings."