Bellway calls on Government to cut stamp duty immediately
Housebuilder Bellway has called for the Government to cut stamp duty immediately to help support a recovery in the UK property market.
It came as the FTSE 250 firm warned that demand is “uncertain” in the short term amid continued pressure from rising building costs and caution among consumers. The Newcastle-based company is among housing firms to have seen demand for new homes dented by elevated mortgage costs and pressure on consumer finances.
Prime Minister Andy Burnham last month ruled out a major overhaul of stamp duty at the Autumn Budget.
However, Bellway chief executive Jason Honeyman said action is needed to reinvigorate the housing market and help support potential new homeowners.
“With the near-term outlook remaining uncertain, we call on the Government to act now to improve access to housing across all tenures, both by helping first-time buyers onto the property ladder and supporting the delivery of affordable and social housing for those who need it most,” he said.
“In order to ease affordability constraints and stimulate demand, an immediate reduction in stamp duty alongside a Government-backed deposit support scheme for first-time buyers would both drive economic growth and accelerate the delivery of much-needed new homes across the country.”
On Tuesday, the company reported that housing competition grew by 10.8% to 9,695 homes over the year to July 31, compared with a year earlier.
It also revealed that underlying operating profits are set to have increased to around £320 million from £303.5 million last year.
Bellway said it saw positive trading in the early part of the spring selling season, but has seen a “moderation” in customer demand since April due to the uptick in mortgage rates.
Mr Honeyman added: “Bellway has delivered a robust performance and growth in volume output, despite ongoing headwinds for our industry.
“Our sharp focus on operational improvement and drive for capital efficiency has provided resilience and supported a strong increase in cash generation and shareholder returns.”
Richard Hunter, Head of Markets at interactive investor, commented “While there may be some sympathy towards the plight of the housebuilders, the harsh reality is that the sector remains moribund. For its part, Bellway has tried to provide some grounds for optimism by managing the levers within its control. In order to maintain cash generation and asset turnover, the group is looking to unlock some of the value from its strategic land bank. This follows the vital Spring selling season which started brightly, but where customer demand then waned in the face of rising mortgage rates, as evidenced by a decline of 5.8% in private reservation rates for the period.”