Bellway has highlighted stronger trading throughout the spring selling season alongside an “expected reduction in social housing output in financial year 2025”.
Cardington Gate, one of the house builder’s developments (picture: Bellway)
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The large house builder highlighted the reduction in social housing output for the full year 2025 from what it described as “current elevated levels” in its latest June trading update.
Bellway revealed in August last year that its social housing completions increased to around 25% of total completions in the year that ended on 31 July 2023, up from 18% in 2022.
By comparison, in a typical year for Bellway, social housing would form between 18% and 20% of total completions.
The builder told Inside Housing that social completions are expected to represent that of a typical year as it remains on track to deliver full year volume output of around 7,500 homes, down from 10,945 in the previous year.
The firm said: “Trading through the spring selling season has been robust, with a sustained improvement in private reservations compared to the first half of the financial year.
“Customer demand has benefitted from an improvement in affordability, driven by a moderation of both mortgage interest rates and consumer price inflation and an increase in wages.
“Overall, the backdrop of market stability has led to headline pricing and the level of targeted incentives remaining stable across our regions.”
The private reservation rate was higher than the equivalent period in 2023 at an average of 152 per week (139 in 2023), with the improvement driven by stronger demand and an increase in outlet numbers.
Notwithstanding the higher demand for private housing, the overall reservation rate rose only slightly to 192 per week (190 in 2023), which partly reflects the expected reduction in social housing output in financial year 2025 from the previously reported levels.
The firm highlighted an increase of its forward order book since the starts of the year to 5,346 homes alongside “good levels of building material and subcontractor availability across the group, with limited overall cost inflation on new tenders”.
Jason Honeyman, chief executive of Bellway, said: “Bellway has delivered a solid trading performance supported by improved affordability and a seasonal uplift through the spring, and we remain on track to deliver full year volume output of around 7,500 homes.
“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 at 31 July 2024. As a result, Bellway remains in a strong position to return to growth in financial year 2025.
“We reiterate our confidence that the group’s robust balance sheet and operational strength, combined with the depth of our land bank, will enable Bellway to successfully capitalise on future growth opportunities.”
Bellway reported a group net debt on £57m as of June this year, but maintains it has a strong and well-capitalised balance sheet.
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