Bellway shrugs off Brexit concerns

Bellway shrugs off Brexit concerns

Housebuilder Bellway has brushed aside fears of a hit to the housing market as it posted a surge in annual profits and cheered 'resilient' demand for new homes.

The Newcastle-based builder posted a 40.6% jump in annual profits to £497.9m for the year to July 31.

It drove revenues 26.9% higher to a record £2.24bn, thanks largely to a 12.9% hike in prices of its houses sold on average over the year to £252,793.

The results came as official figures also showed UK house prices shrugged off the Brexit vote, rising by 8.4%  in the 12 months to August to  £219,000 - up by 1.3% on the previous month.

Bellway said it sold 8,721 homes, which is 12.5% higher than the previous year, with nearly a third - 32% - bought through the Government's Help to Buy boost for first time buyers.

The launch of Help to Buy London in February, which has a higher equity loan ratio, saw 39% of reservations of homes in the capital made using the scheme, according to Bellway.

Bellway said while the EU referendum had caused some jitters over the economy, its reservations remained higher year-on-year, up 13% since the Brexit vote until its year-end.

Interest rate cuts and moves by the Bank of England to bolster borrowing following the vote to quit the EU should keep supporting the property market, the group added.

Weekly reservations have remained robust in the first nine weeks since its year-end, up 9% year-on-year at 162, which is only slightly lower than the 10% growth rate seen in the past financial year.  

John Watson, chairman of Bellway, said:  "The long term outlook continues to be positive, supported by strong customer demand, a substantial forward order book and favourable trading conditions across all areas of the country where Bellway operates.

"Whilst there is some uncertainty following the result of the EU referendum, trading since that date has remained resilient."

They are pencilling in another 3% rise in selling prices of Bellway homes over the year ahead, with a 4% rise in sales by volume.