However, while there are clear signs of recovery, challenges persist in maintaining margins and keeping pace with inflation.

The Newcastle-headquartered company completed 4,577 homes between August and January, marking a 12% increase from the same period a year earlier. This growth was accompanied by an improved reservation rate, bolstered by lower mortgage rates and increased consumer confidence.

Chief executive Jason Honeyman expressed optimism, noting that the company was experiencing a “decent spring selling season” and that the housing market was in a period of recovery.

Bellway’s half-year pre-tax profits rose significantly, climbing 20% to £140.8 million from £117.4m. This improvement was partially attributed to a reduced building safety charge. The company also declared an interim dividend of 21p per share, up from 16p last year, signaling confidence in its financial position.

The company has observed a steady rise in sales rates, reaching 0.76 homes per site per week, nearing the long-term average of 0.85. While this represents a solid improvement, it remains below the highs seen in previous years. Honeyman emphasized that demand has remained robust beyond the March stamp duty exemption deadline, countering speculation that the market boost was short-lived.

Geographically, sales in northern cities such as Manchester and Glasgow have outperformed those in the south east and south west of England, where affordability constraints continue to slow transactions. Bellway’s order book has grown by 18% to £1.58 billion, compared to £1.34bn a year ago, reinforcing the company’s expectation of building at least 8,500 homes this year, with further growth anticipated in 2026.

Despite these positive trends, concerns remain over Bellway’s pricing strategy and profitability. The average selling price of its homes rose marginally to £310,581 from £309,278—an increase of just 0.4%, which lags behind construction cost inflation. While inflationary pressures have eased compared to the peaks of 2022 and 2023, they continue to erode the company’s profit margins, which currently stand at 11%, down from 18% in 2022.

Furthermore, while volume growth has been encouraging, much of it has come from bulk sales to large-scale clients, which typically yield lower margins compared to individual private sales. Property analyst Oli Creasey estimates that private sales rates remain stagnant at around 0.66 homes per site per week, indicating that organic consumer demand is still in the early stages of recovery.

Bellway is not alone in facing these dynamics. Persimmon has also signaled plans to increase output this year while focusing on margin improvement. Similarly, Taylor Wimpey has forecasted improved demand for 2025, aligning with Bellway’s cautious optimism.

However, the macroeconomic environment remains a key factor. Any policy moves from Chancellor Rachel Reeves that could dampen economic growth or push unemployment higher may slow the recovery. Additionally, inflationary concerns could influence the Bank of England’s approach to interest rates, affecting mortgage costs and overall housing demand.