A trading statement from Bellway (BWY) confirmed that not all housebuilders are feeling the pinch. This is because average selling prices at Bellway are relatively low at £280,000, which means that margins have not been squeezed by exposure to the higher end of the market, where house price inflation has drifted down to zero.
Reservations in the period from February to June were up 5.4 per cent, while margins remain strong at 22 per cent. Over 10,000 homes will be built in a year for the first time ever.
Forward sales remain robust, with the value of the order book up 7.8 per cent from a year earlier at £1.7bn. Bellway has also been building up its land bank, investing £678m in land and land creditors since August last year, with gross margins averaging over 24 per cent.