Bellway Lifts Revenue Forecast as Housing Orders Grow and Sales Stay Steady

UK housebuilder eyes 20% growth by 2026 amid stable market conditions and signs of economic resilience

Strong Forward Orders Boost Bellway’s Confidence

UK housebuilder Bellway plc (LON: BWY) has raised its full-year revenue outlook after reporting a 7.7% rise in forward orders and stable sales activity throughout the crucial spring selling season. The firm now expects to complete between 8,600 and 8,700 homes in the financial year ending 31 July 2025, maintaining its previous guidance.

As of 1 June, Bellway’s forward order book stood at 5,759 homes, up from 5,146 homes a year earlier. The total expected sales value has jumped to £1.65 billion, compared to £1.45 billion in the same period last year.

UK Housing Strength Signals Economic Stability

Bellway’s performance comes at a time when the UK economy is showing renewed signs of strength, bolstered in part by steady housing demand and resilient consumer confidence. A mild recovery in GDP, easing inflationary pressures, and expectations that the Bank of England may begin cutting interest rates later in 2025 are helping to revive momentum in the property market.

The housing sector remains a key pillar of the British economy, supporting thousands of jobs across construction, materials, and real estate services. Strong performance by builders like Bellway contributes positively to household wealth, local infrastructure investment, and overall economic sentiment.

Reservation Rates Remain Resilient

Bellway’s private reservation rate per outlet per week stayed flat at 0.61, the same level reported last year. However, when including bulk sales, the reservation rate rose by 8.1%, climbing to 161 group reservations per week, up from 152.

Bulk transactions contributed 0.06 reservations per outlet per week, a notable increase from 0.01 in 2024, reflecting stronger institutional demand.

Selling Prices and Completion Volumes Edge Higher

The average selling price for Bellway homes is now forecast at £315,000, up from the previous estimate of £310,000. The rise is attributed to a higher proportion of private completions in the final quarter of the financial year, helping support margin growth.

Weekly home completions increased by 2.1%, from 192 to 196, compared to the same period last year. The cancellation rate remained consistent, suggesting buyer confidence remains solid despite ongoing macroeconomic uncertainties.

Land Investment and Strategic Expansion Continue

Bellway has been actively expanding its land bank, contracting to purchase 6,759 plots worth £495 million since 1 August 2024. This marks a significant increase from 4,458 plots acquired during the previous period.

The company also signed option agreements for 17 additional sites, up from 15 the year before, positioning it well for future development and volume growth.

The average number of sales outlets operated during the period was 242, with plans to maintain this at around 245 through year-end.

Financial Position Remains Strong

Net debt stands at a manageable £73 million, and Bellway anticipates closing the year with low adjusted gearing, improving on the 6.8% reported in July 2024. The company reaffirmed its target for an underlying operating margin approaching 11%.

The interim dividend of 41p per share, announced in March, will be paid on 1 July 2025, with a dividend cover target of 2.5 times underlying earnings remaining in place.

Outlook: Growth Prospects for 2025 and Beyond

Bellway has confirmed that it is now fully sold for the current financial year. Looking ahead, if market conditions remain stable, the company expects to achieve cumulative volume growth of 20% by July 2026.

This forward-looking projection is in line with broader economic expectations that moderating mortgage rates and ongoing demand for new homes will continue to fuel sector-wide expansion. As housebuilding remains closely tied to GDP growth, Bellway’s momentum may be a positive signal for the wider UK economy.

Investment Insight: What This Means for the Housing Market

Bellway’s solid performance and positive outlook suggest that UK residential property developers remain a strong investment prospect. With stable reservation rates, growing land assets, and improved margins, investors may want to watch:

• UK mid-cap housebuilders like Bellway, Persimmon, and Redrow
• Real estate investment trusts (REITs) focused on residential development
• Construction and building materials suppliers benefiting from sustained housing demand

In an environment where interest rates may ease and consumer sentiment is recovering, Bellway’s forecast offers a positive signal for long-term growth in the UK housing sector and the broader economy.

Sources: (Investing.com, BBC.co.uk)