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A government-backed mortgage scheme for first-time buyers helped support Bellway as the housebuilder reported a steady rise in reservations so far in 2012.
The government’s NewBuy mortgage scheme, which offers 95 per cent mortgages to help first-time buyers on to the market, accounted for almost a tenth of Bellway’s reservations, according to analysts at Investec.
The housebuilder said it would be “some months” before the longer-term effect of the scheme on sales becomes clear.
Overall reservations, net of cancellations, rose 9 per cent to an average of 122 per week. Bellway’s private weekly sales rate jumped almost a fifth year-on-year in the 17 weeks to the end of May.
Bellway said that its 5 per cent sales volume growth target for 2012 was “secure”, as it became the latest UK housebuilder to benefit from a “resilient” spring selling season. Last month Barratt, the UK’s largest housebuilder by volumes, reported its best spring selling season in five years.
The continued strength of London’s housing market also helped support Bellway, as the group’s average selling price edged up. It stood at £190,400 between 1 February and the end of May, up 5 per cent on the same period last year, with London and the south-east driving most of the gains.
Operating margins at the group also improved, as Bellway developed an increasing number of new sites that can enjoy margins of more than 20 per cent, boosting the group’s overall operating margin to 11 per cent.
The group’s net debt stood at £35m at the end of May compared with £57m at the end of May last year.
Commenting on the government-backed mortgage scheme, Mike Bessell, analyst at Investec, said: “For a product that is now 11 weeks old and has realistically only been able to generate completions for five or six weeks, it is too early to say what the long-term effect will be, but this could prove to be a useful support.
“We had never expected it to fix the market, but what it does is provide some additional buyers with means of getting to the market and drive additional interest in homebuilders’ developments.”
Bellway shares rose 3.2 per cent to 768p. The housebuilder is still more than a tenth off its 2012 peak, however, after weakening macroeconomic sentiment weighed heavily on the share price.