Looming public spending cuts are dampening the sale of new homes, according to Bellway Homes
In an interim management statement to the City this week, Bellway became the first housebuilder to warn of the impact of cuts on private housebuilding. It declined to quantify the fall in sales, but said that they had dropped “slightly” on the 100 units a week it had been achieving since the new year.
Bellway added that it had secured its original target of matching last year’s sales, and was likely to beat them by about 200 units by its 31 July year end.
John Watson (below), the firm’s chief executive, said: “We’ve had a slight reduction - I’m not going to give you a number, but it’s not down to 50 or anything. Housing is a confidence thing, and there’s enough out there in the news to damage that confidence. We’ve been a bit buffeted by talk of cuts and closures.”
He added that there was a “hiatus” in council planning departments as they digested the meaning of a letter from Eric Pickles, the communities secretary, that told them to disregard regional plans.
However Watson played down the severity of both situations. “To me it looks like what has happened is that because of a few issues - the election, the World Cup - the normal effect of a UK summer has come a bit early. We’ll know what’s happening when we get to the end of August. I’m not saying we’re heading for a double-dip.”
Bellway’s statement said it had taken 1,800 reservations for next year, and cancellation rates had remained stable at 13%. It has also spent £151m on 2,475 plots, and had conditional contracts on a further 5,275.
Estate agancy Savills recently revised it’s house price projections downwards, predicting falls of between 3% and 7% across the country.