Profits build for Bellway as buyers gain confidence
The Newcastle-based group said home reservations had increased since the announcement, although it confirmed they were still lower than a year ago.
Bellway previously said it had not seen the traditional autumn gains as buyers delayed purchases until George Osborne announced his cuts in October.
But it said the decline in consumer confidence had now levelled out and added it was encouraged by people buying homes at a time that is normally slow for the housing market.
The number of sales secured for this financial year is 4 per cent higher year-on-year and the company expects the number of properties it sells in the six months to 31 January to be the same as last year. With first time buyers struggling to get onto the property ladder, the company has moved into selling more expensive homes - its average sale price has increased 8 per cent to 167,600.
The builder said pre-tax profits could lift to 22.8 million in the first half, although it stressed the full-year result depended on the key spring period.
Bellway's developments in Scotland include Eastfields, in the east end of Glasgow, Duchess Park at Dalkeith, Midlothian, and Forest Walk at Callander, near Stirling.
The positive news from Bellway comes a week after fellow housebuilder Berkeley posted an 18 per cent rise in half-year pre-tax profits and a 20 per cent surge in sales reservations.
Bellway plans to increase the rate at which it builds new homes and will have 200 sites for sale in the new year, up from 185 currently.
The group's land buyers have snapped up 1,260 plots in the past four months and are actively looking for more.
Although the current level of reservations is ahead of expectations, Bellway stressed the market continues to be "tough and testing" and sales in 2011 will be dependent on banks offering affordable mortgages.
Bellway is the only major housebuilder currently to pay a dividend.Jon Bell, an analyst at Shore Capital, said Bellway's trading statement had been "broadly in line with expectations" and "mirrored those of other house builders".
Bell added: "Trading on a significant discount to net asset value and having net cash on its balance sheet, the company offers attractive value to investors in our view."
Chris Millington, an analyst at Numis, agreed that Bellway's share price "is too cheap, in keeping with most in the sector" and mirrored Shore's "buy" rating.
Millington added: "While the outlook for the full year will be dependent on the spring selling season, it is encouraging to see sales hold up well against a strong comparison last year - which benefited from the end to the stamp duty holiday - and the continued negative press commentary."