The Newcastle-based housebuilder saw rising sales and profits but says it is still facing significant challenges

Housebuilder Bellway has called for the Government to do more to boost the housing market despite seeing a rise in sales.

The Newcastle firm has issued a trading update in which it said it expects operating profit to rise to £320m after an increase in the number of housing completions from 8,749 to 9,695 in the year to the end of July. But it highlighted “ongoing headwinds” around mortgage affordability, challenges to the general economy and rising costs for builders.

Chief executive Jason Honeyman said action was needed to reinvigorate the housing market and help support potential new homeowners. He highlighted reductions to stamp duty as one way of boosting house sales.

Bellway said that it had outperformed expectations on the number of houses it sold, while its average selling price rose slightly to £324,000.

Mr Honeyman said: “Bellway has delivered a robust performance and growth in volume output, despite ongoing headwinds for our industry. Our sharp focus on operational improvement and drive for capital efficiency has provided resilience and supported a strong increase in cash generation and shareholder returns.

“The board remains confident that, with supportive market conditions, Bellway is in a strong position to capitalise on future growth opportunities. However, with the near-term outlook remaining uncertain, we call on the Government to act now to improve access to housing across all tenures, both by helping first-time buyers onto the property ladder and supporting the delivery of affordable and social housing for those who need it most.

“In order to ease affordability constraints and stimulate demand, an immediate reduction in stamp duty alongside a Government-backed deposit support scheme for first-time buyers would both drive economic growth and accelerate the delivery of much-needed new homes across the country.”

Bellway said it saw positive trading in the early part of the spring selling season, but has seen a “moderation” in customer demand since April due to the uptick in mortgage rates. It had seen a slight fall in private reservation rates, the update said.

It said it would continue to exercise tight cost controls while the housing market remained subdued, as well as “maintaining a sharp focus on the monetisation of our well-invested land bank and work-in-progress position to support improvements in asset turn and cash generation.”

Bellway – which last week celebrated its 80th anniversary, having been founded as a family firm in Newcastle – added that it expected to complete a £150m share buyback scheme this month and would then launch a scheme to buy another £50m of shares.