ellway has cautioned home sale completions are expected to decrease “materially” this year, after the loss of Help to Buy and the UK housing slowdown hurt the builder’s reservation levels and revenues.
The FTSE 250 company, one of Britain’s largest housebuilders, said weekly reservation rates tumbled 28.4% in the year to July 31.
The firm said the value of its forward order book stood at a lower “yet still sizeable” £1.2 billion at the year end, down from £2.1 billion 12 months earlier.
Like rivals it has seen soaring mortgage rates pile pressure on would-be buyers already grappling with the cost of living crisis. The Help to Buy scheme ending has also hit the industry.
Lender Halifax said earlier this week that average house prices fell 0.3% in July, a fourth consecutive monthly decline.
Bellway chief executive Jason Honeyman said: “The backdrop of macroeconomic uncertainty and cost of living pressures affected consumer demand during the year and, given affordability remains constrained by higher mortgage interest rates, underlying trading conditions are likely to remain challenging in the near term.”
The update comes in the same week Bellway said it is consulting on the closure of its London partnerships arm, which sees it working with housing associations, councils and private rental sector investors on projects, as wells as its South Midlands division.
Under the proposal by the group, which has 22 divisional offices across England, Scotland and Wales , sites in these businesses would move to other arms such as Bellway North London.
The moves could result in potential redundancies that would represent a small percentage of the group’s 3,000-strong workforce.
In the year to July revenue declined 3% to around £3.4 billion which the firm said was a robust performance. There was a strong order book at the start before mortgage volatility began to bite.
Bellway said: “The impact of rising interest rates has been particularly acute for customers requiring a higher loan-to-value mortgage, and exacerbated by the expiry of Help-to-Buy in England in March 2023.”