Bellway’s London retreat

HOUSEBUILDER Bellway plans to focus less on London and concentrate on better opportunities elsewhere.

It has gradually cut back on investment in the capital where it expects to sell fewer homes.

It built a record 10,892 homes in the 12 months to the end of July, up 5.7pc on the previous year. Profit rose 3.4pc, even as it warned that Brexit uncertainty could hit consumer confidence.

The developer said that revenue grew 8.6pc to £3.2bn, while profit reached £ 662.6m. Its operating margin, the amount of profit it makes per pound of revenue after some costs, fell to 21pc from 22.1pc. It follows rival builder Taylor Wimpey, which in July said that its margins were declining.

‘Bellway has been warning for some time that without the higher rates of house price inflation the housing market has enjoyed, margins cannot help but go down,’ said Robin Hardy, an analyst at Shore Capital.

He added: ‘Unless house price inflation is able to return to the 4-5pc level (the last reported rate was only 0.2pc) we cannot help but see all housebuilders being caught in this track.’

The retreat in London comes as areas like Manchester and the East Midlands performed strongly, Bellway said.

It built 1,010 homes in the capital, down from 1,118 in its last financial year. The results follow a strong week for builders, after they were lifted by an apparent breakthrough in Brexit talks.

Bellway’s shares hit their highest point since January 2018, jumping 10.5pc on Thursday but they fell 3.5pc, or 122p, to 3370p yesterday.