Bellway sees North-South buying divide
THE housing market is picking up more quickly in the South than the North but Newcastle builder Bellway says would-be buyers are still facing problems getting on to the property ladder.
Britain’s fourth biggest builder says people are struggling to raise deposits and get a mortgage, which means it is continuing to face historically high cancellation rates.
Incentives such as cash discounting, part exchange and shared equity deals are helping Bellway to secure an average of 105 reservations a week and its stockpile of finished homes has fallen from 1,000 at the end of January to 660 at the end of May.
The group, which last year cut its workforce in half leaving it with 1,200 staff, said it expects turnover from sales in the South to be “much higher” than the North by the end of the year. It says markets in the Midlands, Yorkshire and the North West England are still “fragile”.
The figures were issued in a statement to shareholders, which also said that Bellway is now moving its focus away from reducing its debt and back to building in parts of the UK where demand is strongest. It is also starting to buy new land suitable for building traditional two-storey homes.
Bellway’s order book of homes to complete after the end of July stands at £228m, down from £283m the previous year, but it expects to have half of its volume targets for next year in the bag before its new financial year begins.
In the six months to the end of January, Bellway’s turnover plummeted by 45% to £320m while it lost £48.6m, which included a writedown on land values of £66.3m.
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