Housebuilder Bellway sees ‘short-term hiatus of Help-to-Buy reservations

Housebuilder Bellway has seen a short-term slowdown in customers using the Government’s Help-to-Buy scheme, due to a gap between the current programme ending and a new one launching.

The company said the scheme, which must see buyers reserve a property by next Tuesday, and the new one starting in April next year, has seen a “short-term hiatus” leading to “an understandable moderating effect on the reservation rate in recent weeks”.

But overall, bosses at Bellway remain confident and reconfirmed to shareholders they will pay out a dividend this year, despite a slump in profits related to a £46.8 million charge relating to fire safety and cladding.

Chief executive Jason Honeyman, ahead of the Newcastle-based firm’s annual general meeting, said: “Bellway is in a robust position and notwithstanding the recent widespread lockdown restrictions throughout the country, sales demand is encouraging, and the order book is strong.

“We have substantial cash resources, considerable ability to continue investing in land and with our solid operational structure, we are determined to return the group to its strategy of delivering long-term and sustainable growth.”

The company revealed a 6% increase in the overall reservation rate to 210 a week, compared with a year ago.

It has an order book of 6,186 homes as of November 29 worth £1.77 billion and housing completions for the full year to the end of July 2021 is expected to increase 25%.

Net cash levels stand at £242.9 million with “substantial capacity to invest further in land”.

The new dividend will be 50p a share, although this is a 50% cut on the 100p a share payment of a year ago.

On lending, bosses said that low interest rates remain attractive to borrowers looking to buy a home.

However, the Covid-19 restrictions continue to see valuations and mortgage applications taking longer to process.

Fewer lenders are willing to offer high loan-to-value mortgages and those relying on the Help-to-Buy scheme can start applying for the new programme from mid-December.

However, legal completions cannot take place until April 1.