Falling mortgage rates fuelling housing demand after tougher year, Bellway says

Falling mortgage charges, slower inflation and wage rises have helped carry shopper confidence and make homebuying extra inexpensive, developer Bellway has mentioned.

The agency mentioned it was optimistic about the way forward for the property market regardless of a 30% drop within the variety of properties it offered over the previous yr.

Latest months have seen an “encouraging” degree of buyer enquiries and folks reserving a brand new residence.

Jason Honeyman, Bellway’s chief government, mentioned buyer demand through the yr has “benefited from a moderation in mortgage rates of interest which has helped ease affordability constraints”.

The Financial institution of England reduce the bottom rate of interest final week from 5.25% to five%, however lenders had already been slashing charges within the weeks main as much as the transfer.

A number of sub-4% mortgage offers entered the market this week as competitors to supply cheaper loans heats up.

Bellway mentioned its ahead order e-book, that means properties which were ordered however not but purchased, was considerably greater on the finish of July than the identical time final yr – at 5,144 properties in contrast with 4,411.

This development, together with the latest enchancment available in the market, means the agency expects to return to development over the following yr.

Nonetheless, Bellway is amongst housebuilders to be rising from a extra bruising interval within the wider housing market.

The agency accomplished the sale of about 7,650 properties within the yr to the top of July, down 30% from 10,945 the prior yr.

It generated housing income of over £2.35 billion, greater than £1 billion lower than the £3.4 billion it made this time final yr.

Nonetheless, the non-public reservation fee – that means the variety of individuals placing their names down for a house – averaged at 124 per week, about 14% greater than the earlier yr when demand had began to drop.

The common promoting worth for a house decreased barely from £310,300 to round £308,000, Bellway mentioned.

It additionally highlighted the brand new Labour Authorities’s planning reforms to kickstart housebuilding throughout the UK.

“Bellway is inspired by the Authorities’s plans to reform the planning system to help a marked improve within the provide of latest properties throughout the nation and we look ahead to the publication of its long-term housing technique within the coming months,” the agency mentioned.