Bellway has seen a huge jump in profits over the last year, an increase that has largely been put down to Help to Buy.
The industry-wide boom has seen the Newcastle-based house builder report a profit of £354.2 million before tax, in the year leading up to 31 July. This is an increase of 44 per cent, year-on-year.
Average house selling prices increased year-on-year by a reported 5 per cent, taking average property values up to £224,000, while the company sold 13.2 per cent more homes, also year-on-year. This means is sold off 7,752 homes in this time.
27 per cent of the completed sales were reported to be through a Help to Buy scheme.
However, the rise in profits does not mean that housing supply is catching up to demand. There are many people still out there waiting for the day when they can afford to become a homeowner, but prices, particularly deposits, on houses are still not coming down.
A recent relaxation of rules announced by David Cameron effectively forces local authorities to give up land to be built upon by builders. Although this is helping to free up land, it isn’t clear whether this would up the rate of housebuilding. It is “hard to see whether it would lead to an increase in housebuilding…. It’s early days and we’ll have to see how it unfolds,” said Keith Adey, the finance director of Bellway.
Mortgages, for now, are out of reach of many people wanting to be first time buyers . The growth of individual housebuilders is good, but in the long run, overall changes to the market, and a more fluid market, are needed.