Member Article

Bellway sales up 36% to record £924 million

North-East housebuilder Bellway has posted record forward sales during the year to 31st July.

In a trading update ahead of announcing its results in October, the Newcastle-based national firm said it had achieved growth of 36% in forward sales, with its order book reaching £924.3million, compared with £679.5m at the same point last year.

It saw a 21.2% increase in completions at 6,851, up from 5,652 houses a year ago, and its average selling price jumped from £193,025 to £213,000, it said.

The group has spent around £460m on land, compared with £300m in 2013, and it said its balance sheet strength has been maintained, with net cash of £5m compared with a bank debt of £5.8m a year ago.

Chief executive Ted Ayres said: “The group has reacted positively to the continued strength of the UK housing market, significantly increasing output to satisfy customer demand.

“The favourable trading environment, together with the group’s national presence and strong balance sheet, ensure that Bellway is well positioned to continue its growth strategy and this, together with a strong focus on return on capital employed, should lead to further enhancements for shareholder value.”

Bellway said its divisions in all parts of the country performed well, but business in the London boroughs was particularly good, with sales lifting 42% to 1,236 homes during the period.

The Mortgage Market Review (MMR) introduced strict affordability tests on borrowers in April in order to avoid a housing bubble.

This was followed by Bank of England measures in June which ruled that lenders must ensure no more than 15% of new mortgages are given to people borrowing more than 4.5 times their income.

Lenders will also have to stress test borrowers’ ability to repay loans if their mortgage rate were 3% higher than the rate at the time the loan was approved.

Bellway welcomed these moves as a way to “ensure a long-term sustainable supply of mortgage finance.”

But it added that apart from minor delays on mortgage applications, the MMR has so far “not had a material effect on the reservation rate”.

This was posted in Bdaily's Members' News section by Martin Walker .