According to Bellway, the housing market is returning to normal. The firm made the statement last week when it announced both its sales and profits were recovering.
In the year ending 31 July 2011, the builder sold more than 4,900 homes, compared to just fewer than 4,600 properties the previous year. Bellway is confident that this upward trend will continue and expects sales to grow further this year.
The Group says it can build 6,000 homes without needing to increase corporate overheads and this would help it return to 12% margins. However, it is unlikely to see profit levels return to the boom years when house prices were rising quickly.
Bellway has moved its emphasis away from apartments to concentrate on family homes. Alistair Leitch, the Group’s finance director, said that despite the continuing economic pressures facing families, many are still moving home. People are now buying homes rather than houses, he continued.
Meanwhile, the CML has revealed that contractor mortgage lending has reached its highest rate in over a year as home owners take advantage of low interest rates and remortgage.
In the year ending August, the number of remortgages increased by more than 33%, with many homeowners using the funds to make home improvements. As the housing market improves and more people start looking to buy, people who have ‘done up’ their home will be in a much better position to sell and they will be the ones to benefit once prices start to move upwards again.
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