Housebuilder Bellway saw its profit before tax fall 18.1% to £532.6m for the financial year ended 31 July 2023 and warned that due to a reduced order book and lower reservation rates there would be a “material reduction in volume output in the current financial year”.
The company said its reservation rate had slumped by 28.4% to 156 per week in the most recent financial year and that as a result it was now looking to deliver around 7,500 new homes in its current financial year, compared with the 10,945 homes it delivered in the last financial year – a circa 30% cut.
It added that since the start of the new financial year, customer demand had continued to be affected by mortgage affordability constraints with reservations down on the same period last year.
The housebuilder’s board noted that a “wider than usual range of outcomes are possible, and the final volume outturn will depend on the trajectory of mortgage interest rates and the strength of demand in the autumn and spring selling seasons”.
Jason Honeyman, group chief executive of Bellway, said: “Bellway has delivered a resilient performance against a backdrop of rising mortgage interest rates and challenging market conditions. Looking ahead, our operational strength and experienced teams will enable the group to successfully navigate a changing market, and we will maintain a clear focus on delivering high-quality homes to our customers and making further progress against the priorities set out in our ‘Better with Bellway’ sustainability strategy.
“The depth of our land bank and robust balance sheet provide ongoing strategic flexibility and scope for outlet growth in the year ahead. Notwithstanding the near-term market challenges, Bellway remains very well-placed to capitalise on future growth opportunities and to continue creating long-term value for all our stakeholders.”
