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Bellway makes hay as housing's sun shines

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Bellway (LON:BWY) said almost a third of its new reservations since August involved the government’s Help-to-Buy scheme, adding to fears the housing market may be overheating.

The housebuilder added the boom is also now feeding through into higher land prices especially in the south east. Like its rivals, Bellway has been adding heavily to its land bank with £121mln spent since August on land and land creditors, and terms agreed on a further 4,000 sites worth £220mln.

Demand for houses has been very strong, Bellway added, with reservations since August rising by 43% on a year ago to an average of 144 per week. The government’s Help-to-Buy scheme contributed 31% of that rise.

Sales are also soaring with 20% more completions than last year expected in the six months to January, while the average selling price is up to £205,000 with operating margins now expected to exceed 15% in the full year to July.

Bellway had net cash of £74mln at end November, reflecting in part a higher number of legal completions in the first eighteen weeks, it said.

Shares rose 2% to 1,444p.

Quick facts: Bellway PLC

Price: 3394 GBX

LSE:BWY
Market: LSE
Market Cap: £4.18 billion
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