Bellway (BWY) has reiterated its full-year profit guidance despite warning that the outlook beyond July remains uncertain as higher mortgage rates begin to weigh on buyer activity.
In a trading update covering the period from 1 February to 29 May, the FTSE 250 housebuilder said trading improved noticeably at the start of the spring selling season compared with autumn 2025, although that momentum faded during April and May as borrowing costs increased.
Chief executive Jason Honeyman said Bellway continued to perform robustly in an increasingly challenging market, though he acknowledged visibility beyond the current financial year remains limited.
The company continues to expect housing completions of between 9,300 and 9,500 homes for the year ending July, up from 8,749 homes delivered last year, while underlying operating profit is still forecast to come in between £320 million and £330 million compared with £303.5 million previously.
Despite the softer backdrop, reservation rates remain above levels recorded in the first half of the financial year. Bellway reported a private reservation rate of 0.65 homes per outlet per week, marginally below the 0.67 achieved a year earlier, while incentives averaged around 5%.
The order book has weakened, however. At the end of May, Bellway held forward sales on 5,345 homes worth £1.57 billion, down from 5,759 homes valued at £1.65 billion a year ago.
Alongside slower demand, the builder is also facing renewed pressure on construction costs. Bellway said building materials are becoming more expensive again, although it is attempting to offset inflation through disciplined procurement, tighter control of production costs and the rollout of new standardised house designs.
Land buying remains selective, with management focusing on locations where underlying customer demand has proved more resilient.
Net debt stood at £236 million at the end of May, more than three times higher than the £73 million recorded a year earlier, though the company said the increase was in line with expectations. Bellway still expects adjusted gearing at the end of the financial year to fall within its target range of 5% to 10%.
The builder is pressing ahead with expansion plans and remains on track to open more than 40 new sales outlets during the second half.
Investors appeared encouraged by the decision to maintain guidance despite the tougher market conditions. Shares in Bellway rose 3.25% on Tuesday to close at 1,812p, although the stock remains down 34% since the start of the year.
The board also reaffirmed its expectation that underlying dividend cover for the full year will be around 2.5 times.