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Help to Buy scheme has led to surge in housing interest, claims Bellway

HOUSEBUILDER Bellway has disclosed that the level of incentive it is offering buyers has fallen by half since the introduction of the Government-backed Help to Buy mortgage subsidy schemes.

The company sold 212 homes in Scotland in the first half of its financial year, 26.1% up on the same period of last year.

This helped it to a better-than-expected 73.3% increase in pre-tax profit to £103.8 million for the six months to January 31.

Bellway plans to open new sites in locations including Barrhead and Cumbernauld in the coming months to cater for what the company believes is growing demand.

Finance director Keith Adey said: "Scotland is a business which has done well for us."

He added: "We benefited from land buying in recent years and we are seeing strength in the market now. The Help to Buy scheme in Scotland that came out in October time last year has been a boost to the Scottish market and that has helped to stimulate demand."

Under Help to Buy, purchasers of newly built homes worth up to £400,000 in Scotland or £600,000 in England can seek equity loans from the Government to increase their deposits.

Mr Adey said: "Help to Buy and the publicity around it has led to an increase in interest in housing.

"Housing has become a conversation (topic) around dinner tables again.

"As a result of that we are able to increase our output to satisfy that demand."

He said that Bellway will launch a scheme in Cumberland in the next month to be followed shortly afterwards by sites in Barrhead, Renfrewshire and Darnley in Glasgow.

Bellway sold 3245 homes UK-wide in the period, up 25% on a year earlier.

Average selling prices for Bellway in Scotland were £165,000 in the period, against £212,000 for the company UK-wide.

While sales volumes are still below the pre-crash peak, revenue for the period was a record £701.1m, as it benefited from an increasing bias towards the south of England where prices are soaring.

The strong performance led the group to raise its full-year forecast for sales volume growth to as much as 20%, from 15% previously.

The company typically offers incentives, such as paying buyers' stamp duty, providing carpets or white goods, worth 3% to 4% of the sale price of a property.

"That is half of what it was 12 months ago," Mr Adey said. "Help to Buy is fantastic incentive for purchasers that has little cost for Bellway."

Mr Adey played down the potential impact of the Scottish independence referendum: "We have significant investment in Scotland.

"We have almost a self-sufficient team in Scotland.

"I do not think the consequences of the referendum necessarily affects us one way or the other."

Shore Capital analyst Gavin Jago said: "The company has strong growth prospects with good exposure to London."

Bellway's shares closed up 30p at 1637p.

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