BELLWAY has hailed a “record investment in new sites” in recent months as it looks to meet an anticipated rise in demand for new homes.

The housebuilder indicated future prospects are positive as it issued a trading update for the period from February 1 to June 6, adding that the demand for larger, higher value homes is encouraging, supported by “ongoing customer aspirations for more home-working space”.

However, it also said there was pressure on both manpower and building resources as demand mounts.

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It reported strong sales in the period with an average of 239 reservations per week, against 158 last year, and 244 in 2019.

It said that its record investment in land provides a strong platform for growth and margin recovery in future years, with 15,982 plots contracted since August, against 10,079 in 2020 and 10,620 in 2019, at attractive rates of return.

Bellway also reported a “strong balance sheet” with net cash of £408 million, against net debt of £157m last year and net debt of £261m the year before which “provides resilience and flexibility”.

It said it has a “robust forward sales position”, with the value of the order book rising by 20.5 per cent to £1.889 billion on 2020 when it was £1.568bn and in 2019 when it was £1.643bn, and comprising 6,763 homes, against 6,038 last year, and 6,312 the year before.

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Housing completions for the full year are expected to be around 10,000 homes, against 7,522 in 2020 and 10,892 in 2019, with the average selling price now expected to rise further, to in excess of £300,000, from £293,054 in 2020 and 2019’s figure of £291,968.

The company said: “Securing high quality labour and materials also remains a priority for the group, however, the global increase in construction activity is resulting in growing demand for both skilled labour and material resources. This is leading to some upward pressure on costs throughout the wider industry and for Bellway, these are most pronounced when routine group procurement agreements approach their normal, staggered renewal dates."

“House price growth is, in general, currently offsetting these sector-wide cost pressures and in turn, helping to preserve site-based margins. In addition, Bellway continues to advance its construction programmes with the intention of securing resources at competitive rates. This approach also ensures that the group is well positioned to further increase output in the next financial year.”

It added that its “strong order book, together with further investment in land, work-in-progress and sales outlets, provides an excellent platform".

Jason Honeyman, Bellway chief executive, said: "Demand for our high-quality new homes continues to be strong and customer confidence throughout the wider housing market is resilient."

He added: “We have continued our front-footed approach to land acquisition, making a record investment in new sites, thereby enabling us to grow sales outlets and meet the ongoing demand for new homes in the years ahead.

"This disciplined investment approach, together with our strong balance sheet, ensures that Bellway is in a good position to continue its long-term growth strategy."

Shares closed down 0.34% at 3,469p.