Firm says labour and material shortages pushing construction costs up
Bellway has upgraded expectations of the average sale price of its homes for the year by 拢5,000 amid a continuing boom in the housing market.
The listed housebuilder said it now expected the average selling price of its homes to be around 拢300,000 for the year to July, compared to 拢295,000 last time it updated the market.
With the firm still expecting to sell 10,000 homes this financial year 鈥� a third above the covid-hit figure from 2020 鈥� this price upgrade could be expected to add 拢50m to the firm鈥檚 annual profit.
The business said it had sold 239 homes per week since 1 February, up from 158 in the same period last year, and only just below the 244 recorded in 2019 before covid hit.
It also said it had made a record investment in land in the financial year to date, with deals struck for nearly 16,000 plots 鈥� around 60% up on the equivalent figures for both 2020 and 2019.
Bellway鈥檚 strong update comes amid continuing evidence of a boom in the housing market, with prices now up more than 10% year-on-year . Last week Bank of England chief economist Andy Haldane described the market as 鈥渙n fire鈥�, while the RICS said price rises were now .
Bellway said the sales had allowed the value of the forward order book to rise by 20.5% to 拢1.9bn, including 6,763 homes. However, it said it was also starting to feel the effect of shortages of labour and materials, translating in to 鈥渟ome upward pressure鈥� on construction costs.
It said these pressures were most pronounced when the group had to annually renew its procurement agreements but that, so far, 鈥渉ouse price growth is, in general, currently offsetting these sector-wide cost pressures and in turn, helping to preserve site-based margins鈥�.
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