Buoyant market fuels Bellway record

Buoyant market fuels Bellway record
Housebuilder cites fierce competition among first-time buyers in London for homes priced under £250,000Steve Hawkes
One of Britain’s biggest housebuilders today reflected the strength of the property market by revealing record half-year profits and reiterating there was no sign of a slowdown.

Bellway, seen as a potential takeover target after a series of mega-mergers in the sector, said there was fierce competition among buyers for homes below £250,000, particularly in London and the Thames Gateway.

Pre-tax profits for the six months to January 31 rose nearly 15 per cent to £100.8 million with average selling prices up 4 per cent at £173,000.

Turnover climbed 14 per cent to £576.5 million.

Background
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Howard Dawe, chairman, said the housing market was “stable but competitive”.

The strong results will add to speculation that another interest rate rise is almost certain next month.

The cost of borrowing has shot to 5.25 per cent but government figures yesterday revealed house prices were still rising at four times the rate of inflation.

Economists fear inflation figures for April out later this morning will reveal another rise in the cost of living, forcing the Bank of England to act.

Bellway, which builds about two-thirds of its homes on brownfield or former industrial sites, said that despite higher interest rates its forward order book was at £732 million - “the strongest ever”.

As a result the Newcastle-based group has already achieved 95 per cent of this year’s target for completions.

At the half-year stage, Bellway had sold 3,264 homes, up 10.3 per cent on the same six months a year ago.

Shares in Bellway, which have more than tripled in the past five years, eased 10p to 1666p today.

The group is seen as one of a handful of takeover targets, alongside Redrow and Bovis Homes, following Taylor Woodrow’s £5 billion tie-up with George Wimpey last month.

The deal saw Taylor Wimpey leapfrog Barratt to become Britain’s biggest housebuilder. Barratt bought Wilson Bowden in February. Persimmon snapped up Westbury in November.