Bellway, one of the United Kingdom’s largest housebuilders, has forecast a decline in both home completions and profits for its current financial year, citing subdued demand amid economic uncertainty and affordability challenges. The company, which completed 9,695 homes in the year ending June 30—a rise of 11 percent from the previous period—now expects to deliver between 9,000 and 9,400 units in the year ahead.
The slowdown follows a period of “constrained” customer demand influenced by rising mortgage rates and broader economic pressures, as well as a lower order book stemming from sluggish sales during the spring and summer months. Bellway’s chief executive, Jason Honeyman, linked some of this reduced activity to the anticipated launch of the government’s Your First Home support scheme, which, though announced late last month, has not yet been fully rolled out. Honeyman indicated that some first-time buyers are postponing their purchases in anticipation of the new programme, which is designed to provide financial assistance similar to the earlier Help to Buy initiative.
Honeyman noted regional differences in buyer behaviour, stating that while demand in the North of England and Scotland has remained stable, the South has experienced more caution and cancellations, especially among first-time buyers who would benefit most from the forthcoming scheme. He said he did not expect a material uplift in sales from Your First Home before next summer.
Profit margins are also under pressure due to fewer completions, rising construction costs—particularly for materials such as bricks and plastic piping—and an increase in bulk sales to institutional landlords and housing associations. The company faces challenges from higher mortgage rates throughout the financial year and subdued market conditions following geopolitical disruptions tied to the conflict in the Middle East.
Market analysts have adjusted their forecasts downward in response. Investec analyst Aynsley Lammin previously predicted Bellway’s underlying pre-tax profit would fall to around £270 million from £305.7 million the previous year but has since lowered this estimate further by about 10 percent owing to margin pressures. Other analysts have similarly downgraded their profit expectations in light of Bellway’s updated guidance.
Following the announcement, Bellway’s shares closed down 1.5 percent at £19.56 on the London Stock Exchange. The company also outlined plans to repurchase £150 million of its shares before next summer, a move analysts believe could offset some investor concerns about the profit downgrade. Lewis Roxburgh, an analyst at Goodbody, suggested the market would focus on the buyback programme and overlook recent weaknesses in trading.
Bellway was established in 1946 by John Thomas Bell in Newcastle upon Tyne and remains a key player in the UK housing market. The most recent annual results were broadly in line with expectations following an update in August. Statutory pre-tax profit for the year increased by 20 percent to £270.2 million, up from £221.9 million a year earlier. The company announced a 6 percent rise in its final dividend to 52p per share, payable in January.
Honeyman described the results as a “robust performance” amid persistent challenges in the housing sector, reaffirming that sales have been impacted by higher borrowing costs and market uncertainty.