Bellway Warns on Profit as Soft Demand and Costs Deepen UK Housing Slump
Bellway's Financial Outlook and Market Challenges
Profit Guidance and Market Conditions
Aug 11 (Reuters) - British homebuilder Bellway on Tuesday warned that the near-term outlook remains uncertain and guided that annual profit would be at the lower end of its previous forecast, as softer demand and rising costs deepen Britain's housing market slump.
Bellway said it now expects underlying operating profit of £320 million ($432 million) for the year to the end of July 2026, compared with a range of £320 million to £330 million previously forecast. It will publish its annual results in October.
Challenging Market Environment
Facing what analysts have called one of the most challenging markets in recent history, UK housebuilders are curbing land purchases and slowing construction as affordability concerns, political turmoil, and energy-driven cost inflation take hold.
Despite a temporary early pickup during the spring selling season, Bellway said demand slowed from April as mortgage rates rose, capping a challenging year that was also hit by pre-budget uncertainty last autumn.
Strategic Responses and Performance
To weather the tough market, it said it was finishing ongoing builds to generate cash, while being "highly selective" with land buying.
Total housing completions rose to 9,695 homes for the year ended July, beating its previously guided range of 9,300 to 9,500, helped by robust bulk sales.
The company also announced a share buyback of £50 million.
"While any beat is positive, the scale may not be enough for investors to really get excited about," said Quilter analyst Oli Creasey.
Bellway shares slipped more than 1% in early trading.
Demands for Government Action
DEMANDS FOR GOVERNMENT ACTION
Calls for Policy Support
CEO Jason Honeyman renewed calls to reduce stamp duty, a tax on home sales, and government support for first-time buyers to ease affordability constraints.
"We call on the government to act now to improve access to housing across all tenures, both by helping first-time buyers onto the property ladder and supporting the delivery of affordable and social housing for those who need it most," Honeyman said in a statement.
Government Response and Forward Orders
New British Prime Minister Andy Burnham has denied plans to reduce or scrap stamp duty at the next budget which will be delivered in late October.
Bellway's forward order book shrank to £1.20 billion, from £1.52 billion a year earlier.
($1 = 0.7406 pounds)
(Reporting by Simone Lobo and Raechel Thankam Job in Bengaluru; Editing by Subhranshu Sahu and Keith Weir)
