The Newcastle-based housebuilder has seen lower demand in recent weeks after a brighter spring period
CGI view of new housing estate proposed in Hebburn(Image: Bellway Homes)
Housebuilder Bellway has warned of an uncertain future for the housing market as global issues hit confidence among potential buyers.
The Newcastle-based firm has issued a trading update for the period from February to May in which it said previous guidance on profitability remained. It said spring trading had improved on the picture seen last autumn.
But it highlighted a slowing of customer demand in recent weeks which has been matched by its own caution in land buying. Reservations have fallen on the levels seen during the same period last year.
Bellway added that it was seeing increasing costs from some suppliers as fuel prices and other inflationary pressures weighed on companies. It said that it was “actively managing cost pressures through a combination of disciplined procurement, the introduction of new standard house types, and close control of site production and overheads.”
Chief executive Jason Honeyman said: “Bellway continues to perform robustly in an increasingly challenging market, with customer demand having moderated in recent weeks, after a positive start to the spring selling season. Notwithstanding this, and supported by our forward order book, we are on track to deliver FY26 underlying operating profit within the previously guided range of £320m – £330m.
“The outlook beyond the current financial year remains uncertain, reflecting ongoing geopolitical tensions in the Middle East and a less predictable domestic political environment. Against this backdrop our clear focus on self-help and drive for capital efficiency provides resilience while supporting our strategy to increase cash generation and shareholder returns.”
Bellway said its private reservation rate had decreased by 6.2% to an average of 151 per week while its forward order book had also fallen slightly, to 5,345 homes. Bellway said its land investment “remained disciplined and highly selective” and it was looking to add plots in areas of higher customer demand.
But despite pressures in its market, Bellway is continuing with a £150m share buyback programme launched last year and has increased its interim dividend.
The update said: “We are reiterating our guidance for FY26 volume output of between 9,300 and 9,500 homes, and we remain on track to deliver FY26 underlying operating profit within the previously guided range of £320m – £330m.
“Our industry continues to face challenging headwinds, increasing the risk of a more prolonged period of softer customer demand alongside renewed inflationary pressure on build costs. In response, we are maintaining a sharp focus on the monetisation of our well-invested land bank and work-in-progress position through FY26 and beyond to support improvements in asset turn and cash generation.”
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