Your First Home could increase Bellway construction by 10% — The Guardian
In England, the new first-homebuyer support programme Your First Home could increase the annual number of homes completed by developer Bellway by about 10%. This was stated by the company’s chief executive, Jason Honeyman, The Guardian reports.
Programme conditions
The programme will operate only in England and will be intended for people planning to buy their first home in a new development — a flat or a house. Buyers will be offered a loan backed by a state guarantee amounting to 20% of the purchase price. The minimum deposit will be 2.5%.
There will also be household income restrictions to exclude people with high salaries from the programme, as well as limits on home prices. The full terms, including the launch date, are expected to be announced by Chancellor John Healey in the budget on 28 October.
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Bellway’s expectations
According to Honeyman, in the short term the programme could hold back the market, as some potential first-time buyers may postpone their purchase until it is launched. At the same time, based on previous experience with buyer support schemes, he believes that Your First Home, together with a market recovery, could return Bellway to at least 10,000 completed homes per year. This could happen in a 12-month period beginning no earlier than September next year.
In the current year, Bellway plans to build between 9,000 and 9,400 homes, compared with 9,695 a year earlier. The company explains the lower forecast by a smaller order book, pressure on demand and a 3–4% rise in construction costs. Its order book includes 4,981 homes with a total value of £1.4 billion, compared with 5,285 homes worth £1.5 billion a year earlier.
Bellway’s revenue for the year to 31 August rose by 13% to £3.16 billion, while underlying pre-tax profit increased by 5.7% to £305.7 million. The company’s shares rose by 2% on Tuesday, although they have still lost more than a quarter of their value since the start of the year.
