UK housebuilder Bellway to beat year profit forecasts

LONDON, Dec 13 (Reuters) - British housebuilder Bellway expects to beat year profit forecasts thanks to favourable mortgage-lending conditions and a growing number of completions on higher-margin land.

The Newcastle, northern England, based company said on Friday it had upgraded its operating margin forecast for the year to July 31 2014 to over 15 percent and expected to achieve pretax profit of more than 190 million pounds ($310.20 million).

"I would expect consensus forecasts for pretax profit to move north of 190 million," said finance director Keith Adey, noting a range before Friday's update of 187-190 million pounds.

Bellway (LSE: BWY.L - news) said it had seen strong consumer demand for new homes in its first quarter to Nov. 30, aided by low interest rates and wider accessibility to higher loan to value mortgages.

It said reservations, net of cancellations, had risen to an average of 144 per week, an increase of 43 percent compared to the same period last year.

A recent government scheme, known as Help to Buy, to assist prospective buyers with deposits of just 5 percent has stoked demand for homes built by Bellway and its rivals.

Bellway said Help to Buy mortgages accounted for 31 percent of reservations in the period.

UK house prices are now rising at an annual rate of nearly 7 percent on some measures, above their long-run average, fuelling fears of a bubble amid criticism that the government schemes are boosting demand without helping supply.

Bellway forecast legal completions would rise 20 percent year-on-year in its first half, with the average selling price rising to about 205,000 pounds.

"Bellway's operational and balance sheet capacity ensures that it is well positioned to pursue its strategy of volume growth," Chairman John Watson said.

Shares in Bellway, up 41 percent over the last year, were up 0.8 percent at 1,427 pence at 0922 GMT, valuing the business at 1.7 billion pounds.