Bellway upgrades price guidance as UK property sector stabilises

  • Bellway now expects its properties to sell for an average £305,000 this year
  • The company said the upgraded outlook was down to ‘changes in product mix 

Bellway has raised its selling prices forecast on the back of increasing stability across the UK housing market.

The Newcastle-based developer now expects its properties to sell for an average £305,000 this financial year, up from previous guidance of £295,000, although this new figure is still lower than the £310,306 achieved last year.

It told investors the upgraded outlook was down to ‘changes in product mix,’ including some ‘relatively high-value’ private home completions during the last quarter.

Upgraded guidance: The Newcastle-based developer now expects its properties to sell for an average £305,000 this financial year rather than £295,000

Alongside this, the company revealed its forward order book had expanded by about 21 per cent since last August to 5,346 homes with a value of £1.45billion.

Trading improved during the recent spring selling season, supported by greater affordability driving up customer confidence and reservation levels.

Between the start of February and 2 June, the group’s weekly private reservation rate rose from an average of 139 during the same period in 2023 to 152, while it grew by 6.9 per cent to 0.62 on a per-outlet basis.

The UK housebuilding sector has begun to pick up momeuntum as mortgage rates have moderated slightly due to expectations that the Bank of England will soon cut interest rates.

Jason Honeyman, the firm’s chief executive, said ‘Bellway delivered a solid trading performance supported by improved affordability and a seasonal uplift through the spring’.

He added: ‘We have been encouraged by ongoing healthy levels of customer interest, and combined with the strength of our outlet opening programme, we continue to expect a year-on-year increase in the forward order book.’

Bellway’s results come as figures from Halifax Building Society showed UK property prices flatlined at £288,688 in May, a 0.1 per cent drop on April, but a 1.5 per cent rise over the previous year.

House prices have stabilised since the BoE’s 14 successive base rate hikes and the controversial ‘mini-budget’ dampening demand for mortgages.

Prices have also remained high owing to restrictive planning laws and a lack of new public-sector housebuilding, which has created a massive housing shortage.

Russ Mould, investment director at AJ Bell, said the industry would be ‘hoping for a return to the trifecta of attractive supply and demand dynamics…state support and cheaper mortgages’.

He added: ‘Investors will certainly hope for the same given a healthy period for the industry through the course of the 2010s enabled Bellway to dole out plenty of cash to shareholders.’

Bellway shares were 0.65 per cent up at £28 on Friday morning and have grown by around 22 per cent over the past 12 months.