Bellway see 6.5 percent rise in housing completions

Bellway (LON:BWY) reported a 6.5 percent rise in new house completions in the six months to January, causing shares to bounce higher.

The Newcastle-based property developer noted a “strong” first half trading, with house prices on average rising to 4.2 percent to £291,000 across its UK markets.

However, the overall average selling price of completions saw a small dip to £256,000 from £257,280 the previous year. This was attributed to the fact that a larger proportion of properties built were of a lower-value for social housing, comprising 21 percent of builds as opposed to the prior recorded 13 percent.

Looking ahead, the company anticipates achieving its volume growth target of “around 5.0 per cent” in the financial year. The company aims to fufill its operating margin of “around 22 per cent” for the year, taking into account its “strong trading performance”.

Bellway projects that overall average selling prices are to rise to around £260,000 for the year to end-of-July 2017, up from £252,793 in 2016.

Chief Executive Ted Ayres said in a statement:

“Market conditions remain positive and accordingly Bellway is continuing to invest in a controlled manner, both in land and work in progress, in order to achieve further disciplined volume growth, thereby creating additional value for shareholders.”

The company did however remain cautious of Brexit related developments in the housing markets. Whilst the group insisted that it “remains mindful” of the current climate of uncertainty, the market is still “attractive”. Consequently, the company has plans to acquire 6,287 plots in the period, an increase from the 5,445 plots the year previously costing £380 million in expenditure.

The company attributed the strong figures of growth to the continual competitive mortgage environment. The Help to Buy scheme enacted under the previous Cameron government also served to encourage profits.

This follows news of a Government white paper on affordable housing rent measure. Gavin Barwell, the conservative housing minister said in comments to the BBC on Sunday:

“Whether you’re trying to buy or you’re trying to rent, housing in this country has become less and less affordable because for 30 or 40 years governments have not built enough homes and this White Paper is fundamentally trying to do something about that,”.

Shares in Bellway plc were up by 3.06 percent on Tuesday trading as of 13.58PM (GMT)