Bellway has warned that softer customer demand and renewed build-cost pressure are clouding the near-term housing market despite the housebuilder delivering double-digit growth in completions.
The group completed 9,695 homes in the year to 31 July, up 10.8% from 8,749 a year earlier and ahead of its previous guidance of 9,300 to 9,500. Housing revenue increased by more than 13% to £3.14bn.
Underlying operating profit is expected to be around £320m, compared with £303.5m last year. The adjusted operating margin is expected to fall to about 10% from 10.9%, partly because a greater share of completions came through lower-margin bulk sales.
Chief executive Jason Honeyman said: “Bellway has delivered a robust performance and growth in volume output, despite ongoing headwinds for our industry.”
Those headwinds became more evident as the year progressed. Customer demand improved during the early part of the spring selling season but moderated from April following an increase in mortgage rates. Bellway’s private reservation rate excluding bulk sales fell to 0.49 per outlet per week from 0.52.
The forward order book reduced from 5,307 homes worth £1.52bn a year ago to 4,206 homes valued at £1.20bn. That provides a more cautious signal for future output than the completion figure, which benefited from strong conversion of bulk transactions already in the pipeline.
Affordability continues to constrain the wider new-build market. Buyers face mortgage rates, deposit requirements, transaction taxes, and pressure on household budgets, while developers have to absorb labour, materials, planning, infrastructure, regulatory, and financing costs.
Bellway said it was responding with close control of its cost base and selective investment in land. The company contracted to purchase 8,578 owned and controlled plots during the year across 35 sites, compared with 8,120 plots across 51 sites previously.
Its strategic land bank contains around 48,000 plots, more than half of which have a positive planning status. Having land available in suitable locations can give housebuilders flexibility to respond when demand improves, although planning conditions, infrastructure requirements, and the cost of bringing sites into production continue to affect delivery.
The group’s balance sheet has strengthened despite weaker reservations. Adjusted operating cash flow increased to more than £850m from £638.9m, while year-end net cash rose to £157.7m from £41.8m.
Bellway expects to complete its existing £150m share buyback during August and plans to begin a further £50m programme. That capital allocation comes as developers balance shareholder returns against the need to keep investing in land and work in progress ahead of a future market recovery.
The group has called on the government to improve housing affordability, including through support for first-time buyers and a reduction in Stamp Duty. It has also argued for measures supporting affordable and social housing delivery.
Demand-side support can accelerate sales, but housing output also depends on planning, site availability, infrastructure, construction capacity, and the financial viability of individual developments. Higher build costs can weaken that viability even when selling prices remain relatively stable.
Bellway’s latest figures capture that divide. Completions and cash generation were strong in the year just ended, but slower reservations and the reduced order book create less certainty about the pace of activity ahead.
The company will provide full guidance for its 2027 financial year with annual results in October. Until then, mortgage rates and buyer confidence remain central to how quickly the strong cash position can be converted into another period of volume growth.
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