Housebuilder plots expansion with two new divisions opened this week
Housebuilder Bellway has said it is starting to see increases in both house prices and building costs as the housing market rebounds.
The firm said it had seen a small amount of evidence of both rising prices and “cost pressures” as it reported reservations ahead of expectation in a market update this morning.
The firm said sales per week had shot up 27% since the previous year to 128, with 5,652 legal completions in the year, up 8.2% on 2012.
In its pre-close trading update for the year ended July 31, Bellway said there was “
some evidence that house prices on more recent land acquisitions, especially in the south of England, are modestly ahead of initial acquisition assumptions,” but that increased prices hadn’t yet come through in results.
It added that while it was set to report an improving operating profit margin of 11.4%, there were “some indications of minor cost pressures at a local level.”
A number of housebuilders have reported growing lead-in-times for building products and services since the rebound in the housing market this year, with Willmott Dixon telling Building it had seen day rates for some trades shooting up on certain sites.
However, housebuilders have not previously remarked that supply chain pressures are impacting on profits.
Bellway’s statement said the cost pressures had not had a “significant effect” on operating margin.
Bellway said it’s full year results would show housing revenue up 12% to £975m, and that it had opened two new divisions this week, in Manchester and the Thames Valley, meaning the firm has “significant operational capacity for future volume growth.”
Forward sales are 54% above the same point last year.