Brexit uncertainty and costs hit housebuilder

Housebuilder Bellway has shrugged off easing property prices and surging costs to post a hike in profits.

The group reported a 14.3% rise in pre-tax profits to £641.1 million for the year to July 31.

It said revenues lifted 15.6% to £2.96 billion over the year, while average selling prices for private homes rose by 9.3% to £323,426.

However, Bellway reiterated warnings that house price growth has “moderated” and Brexit could hit demand.

“The board are mindful that the forthcoming exit from the EU in March could pose a threat to consumer confidence during the busy spring selling season,” CEO Jason Honeyman said.

In its full-year results, the group – which has development sites at Perth, Cowdenbeath and South Queensferry – said uncertainty and higher costs was taking its toll on profit margins.

It added that demand has been “less pronounced at the higher end of the market”.

The group has launched a raft of measures to help offset soaring costs of labour and materials in the sector, including the introduction of a new lower costs build range, an overhaul of suppliers and IT changes.

Despite easing house-price growth and demand for more expensive properties across the sector, Bellway said trading remained “solid” in the first nine weeks of the new financial year.

It has had 176 reservations per week, up 2.9% year-on-year, while its order book was healthy at 4,841 homes, up 6.9% on a year earlier.

The group’s annual figures confirm it sold 10,307 homes during the year, the first time the company has sold more than 10,000.

Picture: PA. A Bellway home under construction.