Scottish Daily Mail

Bellway puts the brakes on housebuild­ing

- By Jessica Clark

BELLWAY has cut the number of homes it plans to build this year as high mortgage rates have dampened demand.

The housebuild­er said it is expecting to build 3,445 fewer homes in this financial year as potential buyers have been put off by mortgage rate hikes.

Bellway said it is aiming to build just 7,500 homes this year as the selling price of its properties slumped due to a lack of customer demand. It built 10,945 in the year ended July 31, a 2.3pc drop compared to the 11,198 it constructe­d in the previous year. The overall reservatio­n rate during the year was 28.4pc lower than the prior year at an average of 156 per week, down from 218. The trend has continued into the current financial year, with reservatio­ns dropping from 191 a week this time last year to 133 a week. Demand for new homes has remained strong among second-time buyers, with those taking another step up the housing ladder accounting for 63.8pc of private reservatio­ns.

However first-time buyers have been squeezed the most by rising interest rates as they often need a higher loanto-value mortgage, Bellway said. The drop in demand among first-time buyers was exacerbate­d by the end of Help-toBuy in March this year.

Property prices have fallen due to the slump in demand, with an average selling price of £295,000 in the current financial year, down from £310,306.

However, it added that a ‘wider than usual range of outcomes are possible’ saying that the final number of developmen­ts completed this year will depend on the trajectory of mortgage rates, and demand in the autumn and spring.

Chief executive Jason Honeyman (pictured) said: ‘Bellway has delivered a resilient performanc­e against a backdrop of rising mortgage interest rates and challengin­g market conditions.

‘Looking ahead, our operationa­l strength and experience­d teams will enable the group to successful­ly navigate a changing market, and we will maintain a clear focus on delivering high-quality homes to our customers.’

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