Bellway builds strong growth

BELLWAY shares hit a high yesterday as the housebuilder played down the impact of Brexit concerns on the housing market and upped its annual sales forecast.

The FTSE 250 group said demand for new homes had increased across all regions in the traditionally strong spring selling season and remained buoyant in the weeks leading up to the General Election.

Growth is expected to continue next year despite a “degree of instability” following the election result and uncertainty over Britain’s negotiations to leave the EU, as Bellway suggested all political parties recognised the need for more homes to be built.

Reservations, where a buyer reserves the right to buy a property for a period of time, were up 13 per cent in the four months to June 4, while completions for the 12 months to July 31 are expected to be about 10 per cent higher than last year’s 8,721. Bellway had previously suggested completions would be at least 5 per cent higher.

The average selling price is about £260,000, and Bellway said its investment in higher value locations should drive prices higher. It has contracted to acquire 10,250 plots since last August, up from 8,600 the previous year.

Chief executive Ted Ayres said: “We have made a significant investment in land and work in progress over a number of years and this, together with a strong balance sheet, should ensure that Bellway is well positioned to deliver further volume growth, this year and beyond.”

He cited good availability of affordable mortgages, low unemployment and the Government’s Help to Buy scheme as underpinning healthy demand for new homes. Bellway shares climbed 170p to 3020p as analysts raised their profit forecasts for this year. Bellway is predicted to make about £550million.