Bellway plans share placing to buy land

Aug 6 2009 By Karen Dent, The Journal

BELLWAY is raising cash to snap up land to build new homes amid increasing signs the housing market is starting to improve

The Newcastle-based house builder is to issue more than five and a half million new shares to pay for land in the South of the country, where it is selling more homes than in the weaker Midlands, Yorkshire and North West markets.

Around 60% of the 4,380 new homes that Bellway sold in the year to the end of July were in the South. Its total number of sales fell from 6,556 last year and the average selling price also dropped from £169,729 to £154,000.

The builder blamed the 9.3% drop in prices on incentives it took part in to kick-start the housing market, including discounting, part exchange and selling more homes as social housing.

But the group said it was now looking to “selectively increase work in progress” on its current developments and boost the number of new sites.

“In addition, in recent weeks the group has been successful in contracting to acquire land, predominantly in our southern divisions, at prices the board believes will deliver attractive margins,” said Bellway.

“We will continue to invest selectively to increase our land bank as attractive opportunities become available provided, of course, that the market remains stable.”