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Government schemes help lift housebuilder’s profits by 57%
GOVERNMENT schemes to revitalise the housing market helped give North-East housebuilder Bellway a huge boost as profits shot up 57 per cent, it announced yesterday.
The Newcastle company sold 5,226 homes in the year to July 31 and plans to increase sales outlets by about five per cent in this financial year.
The news comes after rival Barratt reported its profits had doubled, and York-based Persimmon reported a 65 per cent rise in profits.
Bellway said consumer demand for new homes had shown continued resilience, helped by the availability of the Government’s new-buy scheme, which provides up to 95 per cent loan-to-value mortgage products in England.
Growth has been strongest in its southern divisions, resulting in a third successive year of growth in volumes, average selling price and margins.
Bellway’s annual profits increased by 57 per cent to £105.3m, while it surprised the City by increasing its total dividend by 60 per cent to 20p a share.
The UK’s fourth biggest housebuilder has shifted towards family homes and away from flats, as they are more exposed to first-time buyers who are struggling to get on the property ladder.
Profits have also been boosted by the impact of buying cheaper land in the wake of the recession. They have also benefited from lenders starting to offer better rates since the Bank of England and Treasury launched its £80bn Funding for Lending scheme.
Bellway announced in the summer that its chairman Howard Dawe, who has been with the group since 1961, will retire in January and that chief executive John Watson will replace him.
Bellway said the average selling price of its homes rose by 6.3 per cent to £186,648, which was a record for the housebuilder and resulted in an increase in turnover of 12.8 per cent to £975.4m.
The southern divisions of Bellway benefited from a stronger market and accounted for 63 per cent of turnover in the year, representing the sale of 2,851 homes and an increase of 274 on a year earlier.
The average selling price was £216,031, compared with £151,376 in its northern divisions, where the company completed 2,375 homes, an increase of 30.