Housebuilder Bellway has notched up record half-year housing revenues but cut its outlook for property selling prices over the year ahead.
The Newcastle-based group said housing revenues rose 13% to more than £3.5 billion in the year to July 31, with housing completions were up 10.5% to another all-time high of 11,198.
In its full-year update, the company said average selling prices rose 2.6% to £314,400 over the year, but revealed it now expects this to fall in the year to July 2023, to more than £300,000.
Bellway said this is due to changes in the types of houses sold and location, but it comes amid wider signs that the market may be cooling.
Halifax said last week that the average UK house price slipped back by 0.1% in July from a record high the previous month, marking the first month-on-month dip since June last year.
Interest rates have been increased to 1.75% from 0.1% since December as the Bank of England looks to cool rampant inflation, while homebuyers are also under pressure amid the cost-of-living crisis.
Despite this, Bellway insisted that “confidence amongst our customers is strong”, with cancellation rates remaining at 13% for the second year running.
It said build costs have risen throughout the year, pushed higher by supply chain woes and rising wages.
House price gains have so far helped offset the inflation pressures, as well as other efforts to keep a lid on costs, according to Bellway.
The group added that material shortages have gradually improved over the past six months, though it is still seeing ad hoc availability issues at a regional level, which are being managed by its buying teams.
It said “challenges are expected to persist for the industry in the year ahead”, but it is confident of further easing production strains, including through long-standing relationships with sub-contractors and suppliers.
Bellway’s update showed forward orders remained solid, up 4.5% at £2.1 billion, or 7,223 homes, up from 7,082 a year ago.
The reservation rate rose by 6.9% to 218 per week, with average weekly reservations slightly ahead year on year at 170, up from 169.