UK’s Bellway to build 31% fewer homes in 2024 on weak demand
UK HOMEBUILDER Bellway on Tuesday (Oct 17) forecast an over 31 per cent slump in annual home-building in the 2024 fiscal year amid intense margin pressure and persisting weak demand, after it posted an expected decline in profit for the year through July.
Britain’s housing market has been battling a slowdown for much of this year as high mortgage rates dampen demand and weigh on construction activity as consumers rein in spending due to a prolonged cost-of-living squeeze.
Shares fell more than 3 per cent to 2,090 pence in early trading, pulling the housing sector index 1.6 per cent lower.
“Since the start of the new financial year, customer demand continues to be affected by mortgage affordability constraints, with reservations below the comparative rates in the prior year,” Bellway said.
The FTSE midcap housebuilder said it expected a 600-basis-point reduction in underlying operating margin in the current fiscal year which began Aug 1, weighed by lower production, cost pressures and sales incentives to boost demand.
Bellway expected the overall average selling price to be around £295,000 (S$491,701.32) in the 2024 fiscal year, down from 310,306 pounds a year ago, partly hurt by a higher proportion of social housing units.
Weekly bookings in the first nine weeks of the new fiscal year were 133 units, down more than 30 per cent year-on-year.
The Newcastle-based firm said it was targeting building around 7,500 homes in the 2024 fiscal year, compared with 10,945 units in the previous year.
Bellway, which builds everything from one-bedroom apartments to six-bedroom family homes and luxury penthouses, said its underlying pre-tax profit for the year ended July 31 was 532.6 million pounds. Analysts, on average, were expecting a profit of £533.4 million, according to LSEG data. REUTERS
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