(Reuters) – British homebuilder Bellway said on Tuesday it was mindful of affordability concerns despite a seasonal pick-up in customer enquiries and reservation rates as the firm retained its annual build targets.
WHY IT’S IMPORTANT
Affordability concerns have resurfaced in the British housing sector due to a slower-than-expected pace of interest rate cuts, amid wider economic challenges even as builders look hopefully into the upcoming key spring selling season.
The Bank of England cut interest rates by a quarter of a percentage point to 4.5% last week, but the central bank now expects inflation to reach its 2% target six months later than its previous prediction, a factor that could potentially slow down the pace of reduction of mortgage rates.
However, some analysts have pointed to a short-term demand surge before the expiry of temporary tax incentives for buyers of less-expensive homes and first-time buyers at the end of next month.
BY THE NUMBERS
Bellway, which builds everything from one-bedroom apartments to six-bedroom family homes and luxury penthouses, said weekly overall reservation rate per outlet rose 18.6% to 0.51 homes in the six months to January 31.
Its forward order book – a key industry metric which gauges near-term demand – stood at 1.31 billion pounds as at half-year end, compared with 1.01 billion pounds a year earlier.
The Newcastle-based firm reiterated that it would build 8,500 homes in its 2025 fiscal year.
KEY QUOTE
“While mortgage interest rates have increased modestly since the autumn, customer demand has remained robust,” CEO Jason Honeyman said.
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Saumyadeb Chakrabarty)
