Housebuilder Bellway has almost doubled its forward order book in a year to £670m as it continues to be buoyed by the government’s Help to Buy scheme.
The Newcastle-based business has told investors its prospects remain strong, with demand for new homes remaining robust, triggered by growing consumer confidence and a strong supply of mortgage finance.
The firm has made significant investments in land in recent years – some £400m on land and land creditors since last August – a figure it said provides an excellent base for future growth.
That enables the company it to respond positively to market conditions, taking an average of 177 reservations per week since the beginning of February, a rise of 17 a week and 11% compared with the same period last year.
Its forward order book of homes due for completion after July currently stands at £670m, compared with £380m a year ago, and it also expects to achieve an average selling price slightly above £210,000 for the full year.
The company said a strong balance sheet has also been maintained with net bank debt of £47m, compared to £95m in the previous comparable period.
Chief executive Ted Ayres said the UK government’s Help to Buy shared equity scheme continues to be an important selling incentive, especially outside London and the group has taken 879 reservations using the incentive since February 1.
He said: “The strong UK housing market and our disciplined approach to land investment provides a significant opportunity for ongoing volume growth.
“The group has a substantial balance sheet and operational capacity for further expansion.
“Land with detailed planning permission is already in place to achieve next year’s volume growth aspirations.
“This strong position, together with a focus on improving return on capital employed, ensures that Bellway remains well placed to deliver further enhancement to shareholder value.
“The continued strength of consumer demand, together with an acceleration of construction programmes, means that the board now expects the number of legal completions to increase by around 20% for the year ending July 31 2014.”
Earlier this year the housebuilder, headquartered in Seaton Burn with 14 offices around the UK, said it plans to lift house building volumes by 20%, having posted record first-half revenues of £701.1m for the six months to January 31 2014, and pre-tax profits of more than £100m.
The share price rose by 20p to £14.27 after the announcement.