By Scott Wright
BELLWAY has declared demand for its new homes in Scotland is “positive” despite lockdown conditions on construction sites easing more slowly north of the Border than in England.
However, while the housebuilder said construction activity was up and running again at all of its sites in Scotland, it has been so far unable to reopen its divisional offices in Livingston and Hamilton, because of continuing restrictions. Staff usually based in those offices are continuing to work from home.
The Scottish update came as Bellway reported a 31 per cent fall in housing completions to 7,522 across the group in the year ended July 31, attributed to the temporary closure of sites during lockdown. Shares closed down more than four per cent as the builder emphasised that customer interest is increasing, noting that private reservations have recovered to 140 per week in July, compared with 162 at the same stage last year.
Bellway said demand is being fuelled by the Help to Buy scheme, which was recently extended in England in a move which brought a significant boost for major housebuilders. The deadline by which homes must be completed in order to qualify for the equity loan scheme has been extended from the end of December to February 28, 2021, providing leeway for house buyers who saw construction of new homes delayed because of the pandemic.
Bellway highlighted a “strong forward order book” comprising 6,588 homes, up from 4,878 last year, with an expected sales value of £1.76 billion if legally completed, up from £1.2bn. It recorded an average selling price on completions of £293,000, up marginally on the £291,968 booked last year.
In Scotland, Bellway is currently building in Robroyston in Glasgow, and in Livingston at the Laurel Park development. A Bellway spokesman said: “Although we were later opening up in Scotland than in England due to restrictions on construction being placed by the Scottish Government, we have managed to reopen all of the construction sites in Scotland and demand for property is positive.
“We are currently building in 21 sites across Scotland and have also agreed a new site for development in Livingston which comprises of 213 units, a deal that was completed during lockdown.”
Of the 7,522 homes completed in the first half, 6,013 were completed before March 23 – the day lockdown was announced by the UK Government.
The company described the downturn in first-half completions as a “significant reduction due to the considerable effect that Covid-19 has had on business operations”. Prior to lockdown, Bellway said it had been trading strongly, with reservations averaging 211 per week between August 1 and March 23, 5% ahead of the the year prior.
Highlighting its response to the coronavirus, the company said it had not made any claims from the UK Government furlough scheme, and has paid all employees full basic pay from its own resources.
However the board does not intend to pay the interim dividend postponed when its interim results were posted in March. Bellway said its board is “keen to resume dividend payments as soon as there is more certainty with regards to the economic outlook”.
Board members had taken a voluntary 20% cut in base salary and fees during April and May, with the saving donated to various charities.
Chief executive Jason Honeyman said: “The collective response from those who work for and with Bellway, both on and off-site, has been tremendous and this has enabled us to respond positively and responsibly during these challenging times.
“Our attention now turns to the trading year ahead. Whilst the economic outlook is uncertain, sales demand is encouraging, and the group has built a strong forward sales position.”
Shares closed down 108.7p at 2,456.3p.
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