Housebuilder Bellway predicts margins down 50%

05/02/2009

Housebuilder Bellway has said its margins could be 50 per cent lower than previously expected.

The construction firm said its sales dropped 38 per cent last year from 3,252, despite using incentives in "virtually every private sale".

Bellway's performance has been hampered by the large falls in housing market activity, falling prices and a weakening economy.

The firm sold just 2,014 homes in the last six months, at an average price of just £160,000, down from £174,000.

Bellway says it is keen to position the business for the medium and long-term by protecting its infrastructure.

This, it said would enable it "to capitalise when confidence returns, thereby maximising shareholder value going forward".

The Bank of England's review of interest rates today could cheapen borrowing and help encourage people to start buying homes again.

However, the Building Societies Association is not in favour of further rate cuts.

Its spokesperson said: "Interest rates have come down a lot over the last few months, and it's time to wait and see the impact of these reductions rather than lower them again."

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