Bellway warns Your First Home scheme could delay buyers and slow housing market

Right · 2Bellway, the FTSE 250 housebuilder, warned on 13 October that the government's planned Your First Home scheme, a revival of Help to Buy, could slow the housing market further in the near term by encouraging buyers to delay decisions. 1 2 Right · 2Chief executive Jason Honeyman told shareholders the scheme has "the potential to provide meaningful support for first-time buyer demand", but that "the period ahead of its launch may influence the timing of purchasing decisions among some prospective customers". 1 2 Right · 2The scheme, announced by Andy Burnham, is described as offering first-time buyers in England a 20 per cent equity loan towards a deposit of 2.5 per cent, with an initial interest-free period; housebuilders are still waiting for further detail on its scope, design and timing. 1 2

Right · 2Bellway called the scheme a "welcome development" but said it will not immediately solve the market slowdown, and, according to the Daily Mail, said it must go alongside further planning reform. 1 2 Right · 2Honeyman said demand remains constrained by affordability pressures, with mortgage rates above prior-year levels and wider economic uncertainty; City A.M. linked high mortgage rates to the Iran war, while the Daily Mail cited planning delays, rising mortgage costs and broader economic challenges as feeding an "uncertain outlook". 1 2 Right · 2For the year to the end of July, Bellway reported completions up 11 per cent to 9,695 homes and revenue of about £3.2bn (£3.16bn, up 13.4 per cent, per the Daily Mail), ahead of analyst expectations of £3.13bn. 1 2

Right · 2Profit figures differ between the two reports: City A.M. gave pre-tax profit up 22 per cent to £270m, while the Daily Mail gave underlying pre-tax profit of £305.7m, up 5.7 per cent and below forecasts. 1 2 Right · 1The Daily Mail also reported that Bellway expects underlying operating margins to come under pressure from Middle East conflict-related costs, build cost inflation of three to four per cent this year, and 2027 build volumes of 9,000 to 9,400 homes. 2 Right · 1Operating cash flow rose 36 per cent to £868.6m, allowing a £150m extension to the share buyback; shares rallied, along with Taylor Wimpey, Barratt Redrow and Persimmon, after having fallen more than 25 per cent in the year to date. 2

Right · 1Help to Buy was set up by then-Chancellor George Osborne in 2013 and ended in 2022; housebuilders had long sought its return, though some economists caution that supply-side issues from high building costs remain. 1