Housebuilder Bellway has brushed aside the Brexit vote, having previously predicted that the referendum would slow sales growth and dent buyers’ confidence.
In an upbeat statement before its AGM, the group said customer demand for new homes was strong, as sales reservations rose 7 per cent to an average of 176 a week for the first 18 weeks of its new financial year.
It also expects housing completions to rise by around 5 per cent in the year to the end of July 2017 – a slight fall on the near 13 per cent hike posted in the previous year.
Buoyant: The housebuilding sector continues to defy expectations, as low interest rates and government schemes like Help to Buy underpin activity in the housing market
The property market has been underpinned by record low mortgage rates and resilient consumer confidence since the vote to leave the European Union.
This stands in contrast with predictions from many economists and the Government beforehand.
Property listing website Rightmove warned yesterday, however, that uncertainty would weigh on the market for some time and forecast asking price rises of just 2 per cent next year, down from 3.4 per cent this year.
In a further sign of the the group’s renewed confidence, Bellway has resumed land buying after putting purchases on hold around the EU referendum.
The move has seen the Newcastle-based firm snap up 40 new sites to develop and spend £263million on land and land creditors.
Bellway chief executive Ted Ayres said: ‘The group has made an encouraging start to the financial year and customer demand for new homes continues to be robust.’
Shares rose nearly 3 per cent, or 61p, at 2,454p after the update.
However, while housebuilders’ shares have clawed back some of the losses seen immediately after the Brexit vote, many remain underwater compared to before the result came in. Bellway shares are still down 10 per cent on their closing level of 2,734p on 23 June.
The group added that site visitor numbers and hits to the group’s website were both ahead of last year, while its cancellation rate stood at 11 per cent, edging up slightly on the 10 per cent rate seen a year earlier.
Sale prices were firm across its regions and were ‘stable and robust’ in London, where it focuses on affordable homes and has been shielded from a tough market for high-end properties.
Analysts said the housebuilding sector was holding up despite doom and gloom predictions post Brexit.
An interest rate cut to 0.25 per cent in August and moves by the Bank of England to bolster borrowing following the vote to quit the EU has helped support the housing market.
The Government’s Help to Buy equity loan scheme for first-time buyers has also continued to buoy the sector.
Laith Khalaf, analyst at Hargreaves Lansdown, said: ‘The housebuilding sector continues to defy expectations, as low interest rates and government schemes like Help to Buy underpin activity in the housing market.
‘The Brexit vote has dented share prices which suggests the market is expecting a Wile E. Coyote moment in 2017 when the sector looks down and realises it’s run off the end of a cliff, so far though, the housebuilders are holding up pretty well.’