UK Home Builder Builder Bellway Set to Break Record: Building Over 10,000 Homes this Year
By Alexander Reed @ Real Estate Daily
March 29, 2018

Bellway, the UK-based home builder, is optimistic about 2018 and is planning to build over 10,000 new homes. The company has overcome quite a few obstacles in the home construction industry. There are shortages of building materials to replace cladding, such as bricks, and roof tiles are taking much longer to arrive to the UK. Also, the cost of imported materials has increased due to a weaker pound. However, despite these problems, Bellway has been able to sell homes, mainly outside of London, for an average of £275,945, which has gone up by 7.7% in the first half of its financial year.

Key Takeaways

  • Bellway is planning to construct over 10,000 homes in 2018 for the first time.
  • The company’s building costs have increased by 3% due to the high demand for and short supply of materials like bricks and roof tiles.
  • Bellway has already sold 4,741 homes by January, which is 6.3% more than they had sold during the same time period last year.
  • The Office for National Statistics commented that home prices are rising throughout much of the country.

Brief

UK house builder Bellway said it was on track to build more than 10,000 homes this year for the first time, despite an industry-wide shortage of materials such as bricks and roof tiles.

Jason Honeyman, Bellway’s chief operating officer, said the shortage was exacerbated by a higher demand for bricks in the wake of the Grenfell Tower fire, as construction firms sought alternatives to cladding.

Materials are taking about three or four months to arrive – both from within the UK and overseas – instead of two to four weeks. Some roof tiles are in such short supply that they take five to six months to be delivered to building sites, Honeyman said.

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In addition, the weaker pound has pushed up the cost of imported materials. Bellway’s building costs rose 3% in the first half and this is likely to continue in the second half. Honeyman said bricks and roof tiles had risen even more in price, by 6-7%.

He added that shortages of skilled builders – a perennial issue in the housebuilding industry – were less of an issue for Bellway at the moment.

Overall, the company said it was benefiting from a “favourable” backdrop of low interest rates and mortgage availability, as well as a focus on homes priced in the middle-to-lower end of the market, predominantly outside London where demand is slowing.

Newcastle-based Bellway sold 4,741 homes in the first half of its financial year to the end of January, an increase of 6.3% on the same period a year earlier. It has put the housebuilder on course to complete a record number of houses in the full year to the end of July, as consumer confidence is “seemingly unaffected by the ongoing uncertainty surrounding the forthcoming exit from the EU”, the company said. The average selling price of a Bellway home was £275,945 in the first half, up 7.7%.

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“The group has invested significantly in land to achieve future growth, in a market place in which customer demand is robust and mortgage availability remains good,” said John Watson, Bellway’s executive chairman.

View the original article at The Guardian