Northern construction boom helps housebuilder Bellway to 25% property sales boost
02-11-2015
By Peter Campbell for the Daily Mail
A construction boom in the North has helped housebuilder Bellway report a 25 per cent surge in the value of properties it has completed and sold.
The company sold 4,200 off-plan properties worth some £975million during the first half of its financial year – 25 per cent higher than the previous year.
Some 1,822 homes were completed in the North in the six months after April 2014, an increase of 23.6 per cent compared with last year.
Bellway buoyant: The housebuilder's chief executive Ted Ayres said annual profits would grow during the year
Housebuilders have enjoyed strong growth outside of London, as a nationwide economic recovery leads to increased demand in the regions.
Figures from the National House Building Council showed that Yorkshire and the Humber, Wales, Northern Ireland and West Midlands have all overtaken the capital in terms of the year-on-year growth in the number of new homes being registered.
Bellway’s bumper trading update pushed its FTSE 250 shares 37p or 2 per cent higher to 1,866p in lunchtime trading.
The group said margins would climb to 20 per cent, up from 15.6 per cent last year, due to rising selling prices – which were up 3 per cent at £219,000.
The housebuilder's chief executive Ted Ayres said annual profits would grow during the year.
Bellway stepped up its investment in land during the half-year, investing £335million compared with £240million in the same period last year. It also has plans to open a 16th regional operating division this financial year.
There have been concerns that house prices will slow and even begin to fall this year, especially in parts that have seen stunning growth levels in the last two years.
But Ayres said that 2015 looked ‘favourable’ in spite of the slight slowdown.
Stephen Rawlinson, analyst at Whitman Howard, said: ‘The housebuilders are as a group starting to reach cruising altitude as the percentage gains in volumes and pricing start to reduce and the market stabilises.
‘Bellway is one of the groups that wants to fly at a higher altitude and is still a bit more foot down than others. All is set well for the housebuilders in our view and we remain positive.’