Bellway PLC (LSE:BWY) said the recent uncertainty in the housing market has caused reservations and prices to fall, with the builder now using incentives in some parts of the country to help sales.
Orders on the books currently stand at £1.7bn (£2.4bn a year ago) but given the profile of completions in the coming months and prevailing reservation rates, a further decrease in the order book is likely by 31 July 2023, the company said in a trading update.
Bellway added that it remains on track to meet its target of 11.000 homes in the year to end-July 2023 (2022: 11,198) and a price on average of £300,000 (2022: £314,400), but the 2024 financial year will see lower year-on-year volumes due to reduced orders.
Inflation pressures also remain a concern, said the builder, though these are easing now with better product availability.
Land purchases have been scaled back because of the tough market with £362mln spent since August against £926mln in 2022.
Cash is improving as a consequence with the net position expected to rise to £200mln by July’s year-end.
“While customer interest is currently healthy, the board remains mindful that cost of living pressures and the uncertain path of future interest rates could impact housing demand,” said Jason Honeyman, Bellway chief executive.