Bellway London’s Fielder’s Quarter development in Barking-- the company’s average selling price in the capital neared £390,000
Housebuilder Bellway blamed the government’s now-demolished mini-Budget for a potentially shrinking housing market as it revealed a drop off in private reservations today, alongside record annual revenue.
Jason Honeyman, chief executive, told The Standard that the housing market is “in the eye of the storm until things settle down politically”. He blamed the slowdown in the market from late September on the government’s ill-fated tax and spending plans “pretty much 100%”.
“I need stability like any business needs stability, so we hope that they sort themselves out soon, so people can get on with their jobs and their lives … Help for the first-time buyer with deposits, that’s probably a good thing to keep the market moving, otherwise we are going to see it shrink.”
Looking at the recent Downing Street U-turns, he added: “We’ve seen all the changes and I think we are in the middle of it. And it worries me greatly, because the actions of the government are putting people’s jobs at risk.”
The FTSE 250 company, which in London focuses on the commuter belt, said the average number of weekly reservations since the turn of its financial year in August dropped by 12% to under 200. That followed record annual revenue of over £3.5 billion, up over 13%.
Bellway reported an average private sale price from its standalone London business of just under £390,000, up by around £52,000 in a year. London represented almost 8% of the company’s completions in the year to July 31, most of them apartments. Such prices are relatively affordable for the capital, in developments such as the Eastside Quarter in Bexleyheath and Fielders Quarter in Barking.
Honeyman said that the unprecedented withdrawal of hundreds of mortgage offers as the mini-Budget upended the outlook for UK interest rate rises showed lenders were “acting quite responsibly,” and that the changes since had consequences for developers.
“It’s the same for the lenders as it is for the builders – we need to get used to a higher interest rate era. The days of 1% are gone, and that will take time to settle through the system.”
Bob Singh of Uxbridge-based mortgage broker, Chess Mortgages, said: “it’s a brave buyer who buys now given a market correction, and potentially a severe one, is the nation’s Chirstmas Present from No.11.
“Lenders’ new affordability calculations for both owner occupier and buy-to-let mortgages mean buyers have to put in far higher deposits to bridge the gap between the buying price and what the banks will lend. The stamp duty savings, whilst helpful, will do nothing to improve the situation.”
Bellway’s shares slipped 5p to 1821p. On the day before the mini-Budget, they were trading around 1930p.
