Bellway has a spring in its step

The UK’s fourth biggest housebuilder said uncertainties in the autumn period had diminished as a more normal reservation pattern returned.

The Newcastle-based company posted a 9 per cent increase in its sales rate in the 17 weeks to May 31 to 111 units per week as the average selling price increased 4 per cent to £182,000.

Housebuilders are expecting a difficult 2011 as public spending cuts and weaker consumer confidence test the market.

Bellway said the improvement in average house prices was driven by changes in its product mix and a greater contribution from higher-value units in and around London, where demand is strongest.

Bellway said it spent £220m on land and land creditors in the year to date, which saw net debt rise to £57m as at May 31.

The company warned constraints to mortgage supply, particularly to first-time buyers, combined with wider economic concerns, posed challenges to the housing market.

But it added with a strong order book and the increasing contribution from sites acquired since the downturn it was well positioned to deliver growth.

Bellway reported pre-tax profits of £24m in the half year to January 31, up from £19m a year ear- lier.

Bellway was formed in 1946 and now employs around 1,400 people in the UK.