Bellway finds homebuyers more confident
Housebuilder Bellway has hailed a 'healthy spring selling season' after achieving increased home sales and prices.
Healthy: Bellway detects a return towards more normal selling patterns
Its sales rate rose by 9% to 111 units a week in the period from the start of February until the end of May.
And its average selling price was up 4% to £182,000.
Bellway said that the uncertainties affecting consumer confidence during a challenging autumn trading period appeared to have diminished.
'There has been a return towards a more normal reservation pattern with a healthy spring selling season, despite ongoing concerns remaining in the wider economy,' it said.
The company put the improvement down to changes in its product mix, plus a bigger contribution from higher-value units around London where demand is strongest.
But it added that constraints on mortgage supply, particularly to first-time buyers, continued to pose challenges to the housebuilding sector.
Bellway has spent £220m on land and land creditors so far this year and this, together with a rise in work in progress, increased the group's net debt to £57m at May 31.
Its shares rose 29.5p to 726.5p in trading today.
View from the City
'The tone of Bellway's interim management statement is one of relief,' said Anthony Codling of broker Oriel Securities. 'The second quarter is typically a tricky time for housebuilders, but this quarter is far from typical.
'The direction of underlying housing market indicators is positive and we also believe that the housebuilders themselves are starting to sleep better at night and are not as fearful of the weekly sales reports as they once were.'
'The worst does appear to be behind them rather than in front of them.'
He kept a sell recommendation on Bellway, in the belief that greater upside would be seen in Taylor Wimpey and Barratt Developments.
Analysts at broker Panmure Gordon said: 'We view Bellway as a high quality housebuilder. With trading robust at the business, we reiterate our buy recommendation and 761p target price.'
Most watched Money videos
- BMW's Vision Neue Klasse X unveils its sports activity vehicle future
- Blue Whale fund manager on the best of the Magnificent 7
- How to invest for income and growth: SAINTS' James Dow
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Tesla unveils new Model 3 Performance - it's the fastest ever!
- Skoda reveals Skoda Epiq as part of an all-electric car portfolio
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Mail Online takes a tour of Gatwick's modern EV charging station
- 2025 Aston Martin DBX707: More luxury but comes with a higher price
- Land Rover unveil newest all-electric Range Rover SUV
- Mercedes has finally unveiled its new electric G-Class
- Don't ditch name and shame plan - it has the City running...
- Drivers abandon Direct Line after insurance premium hikes
- Banks should be forced to disclose why they debank small...
- Wetherspoon's profits buoyed by Guinness boom among...
- Boohoo sales plummet as debts surge
- Millions kept in the dark over City watchdog's mystery...
- TSB to close one in six branches: More than 6,000 shut by...
- Hedge fund tycoon's £34m silver salvage claim sunk at the...
- Spring property bounce is a damp squib - Rics estate...
- Snoop Dogg cannabis firm to ditch London after losing 97%...
- Brewdog founder James Watt steps down to become 'captain'...
- Tesco uses AI to give millions of Clubcard holders...
- Events planner Informa hikes share buyback scheme to £500m
- JLR offering £150 a month towards the cost of insuring...
- Investors pull cash out of UK equity funds for the 35th...
- Ford boss says it may restrict petrol models in the UK to...
- We do need to resolve inequality admits £8m-a-year...
- Could the Bank of England really cut interest rates this...