Bellway's share price rose 4.32 per cent this morning after the housebuilder said it expects demand to remain robust following the results of last week's General Election.
The FTSE 350 housebuilder reported a 13 per cent rise in the rate of reservations for new homes in the period from 1 February to 4 June, to 221 per week.
Bellway said that demand for its homes did not slow in the run-up to the General Election. It added that its investment in land rose significantly with 10,250 plots contracted during the period, up from 8,600 last year.
At the time of writing, Bellway's shares were up 4.32 per cent at 2,973p.
Why it's interesting:
Bellway's upbeat trading update comes a day after its peer Crest Nicholson warned that uncertainty after the election will hit the UK housing market.
Crest was among a raft of housebuilders whose shares took a hit last week following the results of the General Election.
What analysts said:
George Salmon, equity analyst at Hargreaves Lansdown, said: “There is something of an arm-wrestle going on within the UK’s housing market at the moment.
"Recent figures from both Nationwide and Halifax show prices falling, while political uncertainty has added to the concerns. However, the housebuilders have released a relentless string of positive updates, and these numbers from Bellway are very encouraging too. Reservation rates are impressive, and its guidance for the future is upbeat to say the least.
"Results like these add weight to the argument that, barring a sudden rise in interest rates, demand for new homes will remain buoyant. After all, the fires of demand are being stoked by supportive government policies and a sharp supply-demand imbalance.”
What Bellway said:
Ted Ayres, chief executive, Bellway, said:
“Robust market conditions, together with a clear operational focus, is enabling Bellway to continue increasing its contribution to the supply of much needed new homes.
"We have made a significant investment in land and work in progress over a number of years and this, together with a strong balance sheet and substantial operational capacity for expansion, should ensure that Bellway is well positioned to deliver further volume growth, this year and beyond. This successful implementation of our disciplined growth strategy is leading to ongoing enhancements in shareholder value.”