UK homebuilder Bellway forecasts a 31% fall in home-building for 24’ due to weak demand

After reporting an anticipated fall in earnings for the year through July, UK homebuilder Bellway on Tuesday estimated an over 31% decline in annual homebuilding in the 2024 fiscal year amid significant margin pressure and persistently weak demand.

Because of high mortgage rates and customers' long-term cost-of-living restraints, the property market in Britain has been experiencing a downturn for a large portion of this year.

Early trading saw a more than 3% decline in shares, dropping the housing sector index 1.6%.

"Since the start of the new financial year, customer demand continues to be affected by mortgage affordability constraints, with reservations below the comparative rates in the prior year," Bellway stated.

Bellway anticipated that in the 2024 fiscal year, the average selling price would be around £295,000, down from £310,306 the previous year, in part due to a higher percentage of social housing units.

Weekly bookings fell by more than 30% during the first nine weeks of the current fiscal year to 133 units.

The Newcastle-based company stated that it planned to construct roughly 7,500 homes in the 2024 fiscal year, down from 10,945 units the year before.

Bellway, which constructs anything from one-bedroom apartments to six-bedroom family homes and opulent penthouses, reported an underlying pre-tax profit of 532.6 million pounds for the fiscal year that ended on July 31. According to LSEG statistics, analysts had predicted a profit of £533.4 million on average.

(Sources: investing.com, reuters.com)