Housebuilding firm Bellway has reported a strong trading performance through the spring, helped by improved affordability supporting an increase in customer confidence and reservation rates, compared to the first half of the financial year.

The group’ latest trading update was for the period from 1 February to 2 June.

Bellway stated that the private reservation rate per outlet per week of 0.62 increased by 6.9% in this period, compared to last year’s equivalent (0.58), and that this was delivered from a higher number of outlets, which averaged 245 in this time, compared to 239 in 2023.

Overall, headline pricing has remained firm and Bellway said that “incentives continue to be used on a targeted basis”.

Bellway group chief executive, Jason Honeyman, said that the group had delivered a “solid” trading performance supported by improved affordability and a seasonal uplift, and revealed that Bellway remains on track to deliver a full-year volume output of around 7,500 homes.

“We have been encouraged by ongoing healthy levels of customer interest and combined with the strength of our outlet opening programme, we continue to expect a year-on-year increase in the forward order book at 31 July 2024,” Honeyman said. “As a result, Bellway remains in a strong position to return to growth in financial year 2025.

“We reiterate our confidence that the group’s robust balance sheet and operational strength, combined with the depth of our land bank, will enable Bellway to successfully capitalise on future growth opportunities.”

Reflecting the improvement in trading and growth in outlet numbers, Bellway reported that its forward order book has increased from 4,411 homes at the start of the current financial year.

The forward order book as of 2 June comprised 5,346 homes. However, this compared to 6,172 homes at the same time last year.

Lead equity analyst at Hargreaves Lansdown, Sophie Lund-Yates, added: “Bellway has warned that General Election campaigning could dent trading over the next few weeks. That’s a fly in the ointment the sector could do without, given falling volumes as potential customers wait for the economy to stabilise.

“Bellway’s trading statement does suggest conditions overall are starting to normalise, with large swings in mortgage rates looking like they may be in the rearview mirror. Demand for newbuilds has picked up since the first half of the year, which together with rising house prices will help to stem some of the margin losses. There’s still work to be done on the cost front, and some near-term political uncertainty needs to be navigated.”

The group’s next scheduled trading update, covering the full financial year to 31 July 2024, will be announced on 9 August.

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