Bellway has warned the government’s revival of the Help to Buy scheme could further slow the housing market in the near term by encouraging housebuyers to delay decisions.
The FTSE 250 housebuilder said Labour’s new equity loan scheme, Your First Home, is a “welcome development” but cautioned it will not immediately solve the UK’s housing market slowdown.
Jason Honeyman, chief executive of Bellway, told shareholders on Tuesday: “While the Government’s proposed Your First Home scheme has the potential to provide meaningful support for first-time buyer demand, the period ahead of its launch may influence the timing of purchasing decisions among some prospective customers.”
British housebuilders have been calling for the government to boost housing affordability as soaring mortgage rates caused by the Iran war put Brits off moving homes.
Honeyman said: “Customer demand remains constrained by affordability pressures, with mortgage interest rates above prior-year levels, while wider economic uncertainty continues to affect homebuyer decision-making.”
Bellway’s boss said these “subdued trading conditions” have plagued the sector for most of the year, adding that housebuilders are still waiting for “further detail on the scope, design and timing” of Your First Home.
Bellway sees ‘robust’ trading
The scheme will offer first-time buyers a 20 per cent equity loan towards a deposit of 2.5 per cent, with an initial interest-free period.
Andy Burnham has said the programme will help young people who cannot rely on the “bank of mum and dad” get on the housing ladder.
Housebuilders and property experts had long been demanding a return to the Help to Buy programme, which was set up by then-Chancellor George Osborne in 2013 but ended in 2022.
Shares in London’s listed housebuilders surged after the new scheme was announced, but some economists have cautioned that the supply-side issues caused by soaring building costs must still be addressed.
Bellway told shareholders on Tuesday that it managed to produce a “robust” performance in the year to the end of July, despite the “ongoing challenges across the housing market”.
The group’s total housing completions grew by 11 per cent to 9,695 homes, driving a 14 per cent uplift in revenue to £3.2bn. The firm’s pre-tax profit jumped by 22 per cent to £270m.
“Bellway has the financial strength, operational capability and land bank to respond as market conditions improve and increase the delivery of much-needed new homes over the medium term,” Honeyman added.