Burnham's first-time buyer scheme risks slowing the property market further, warns major housebuilder

Bellway has warned that Labour's first-time buyer scheme risks slowing the property market further and must run alongside further planning reform. 

Boss Jason Honeyman said the Your First Home scheme has 'the potential to provide meaningful support' but cautioned that buyers could delay buying until more details are revealed. 

'The period ahead of its launch may influence the timing of purchasing decisions among some prospective customers,' he told investors. 

The scheme, announced by the Prime Minister last month, aims to help first-time buyers in England to get on the housing ladder with a small deposit. 

It will be open to first-time buyers in England with a deposit of 2.5 per cent. 

Bellway welcomed the scheme, which is set to help 'more people access home ownership and accelerate the delivery of much-needed new homes', but warned it would need to go hand in hand with further planning reform. 

Housebuilders have ramped up their demands for planning reform in recent months, warning current rules do not go far enough to meet Labour's lofty target of delivering 1.5million homes. 

Bellway said continued planning delays, alongside rising mortgage costs and broader economic challenges, had fed into an 'uncertain outlook' which would continue to 'constrain housing delivery'.  

It warned its underlying operating margins are expected to come under further pressure amid cost pressures driven by the Middle East conflict. 

The housebuilder said it had received 'price increase requests from suppliers and subcontractors', but had 'continued to negotiate robustly, limiting the impact on agreed rates'. 

It expects build cost inflation of between three and four per cent this year, leading to a fall in build volumes in 2027 to between 9,000 and 9,400 homes, from the current 9,695.

In August, FTSE 250-listed Bellway called for the government to cut stamp duty immediately to help support a recovery in the property market. 

Some investors are now betting Burnham’s Your First Home scheme, effectively a revamp of the earlier Help To Buy initiative to jump-start the housing market, could ride to the rescue of housebuilders. 

Bellway shares have fallen by more than 25 per cent in the year to date, but recovered somewhat after Andy Burnham announced the Your First Home scheme. 

Bellway's revenue for the year reached £3.16billion, up 13.4 per cent and ahead of analysts’ expectations for £3.13billion. 

The business announced a strong adjusted operating cash flow, up 36 per cent to £868.6million. This means it can return more cash to shareholders via a £150million extension to its share buyback programme.

But underlying pre-tax profit hit £305.7million, up 5.7 per cent year-on-year, but below forecasts. 

Victoria Scholar, head of investment at Interactive Investor, said: 'Despite weaker margins and mortgage affordability concerns, shares in Bellway are rallying this morning thanks to its share buyback, revenue growth, robust housing completions and focus on cost savings. 

'The broader sector is enjoying a bounce too with the likes of Taylor Wimpey, Barratt Redrow, and Persimmon also enjoying strong gains.'