Bellway says Budget ‘mixed messages’ hurting UK property market

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The UK government has been “talking down” the property market by sowing uncertainty over potential tax rises in the Budget, said the boss of UK housebuilder Bellway, who predicted a jump in home sales next year.

“There is hesitancy in the market at the moment. We have many customers who have got concerns about the October Budget . . . so they are delaying decisions,” said Jason Honeyman, chief executive of the FTSE 250 developer.

His comments underscore how nerves about potential tax rises in the upcoming fiscal event are cutting across the new Labour government’s efforts to build momentum around UK economic growth, including by pledging the biggest housebuilding programme in Britain for two generations.

Honeyman said there were “mixed messages”, with the housing and growth agenda “damped a bit by talking down the market”, adding that potential home buyers were picking up on the government’s tone, more than specific policies.

“Not everyone is familiar with IHT, CGT or NI,” he said, referring to inheritance tax, capital gains tax and national insurance. “The noise is that tax rises are on the way. That is what has hit people on the street.”

Bellway predicted a jump in home completions next year, once the Budget uncertainty is resolved, on the back of falling mortgage rates. Shares in the company rose almost 8 per cent in early trading on Tuesday.

The Newcastle-based group said its sales rate was almost 50 per cent higher since the summer compared with the depressed housing market in the same months last year, though still weaker than a typical autumn. Its order book rose to 5,109 homes at the end of September, from 4,636 roughly a year earlier.

A steady fall in mortgage rates throughout much of this year has helped the property market recover from a 10-year low in overall property sales in 2023, when high and volatile borrowing costs kept many buyers on the sidelines.

In the wider UK housing market, sales were up 25 per cent in September compared with a year before, according to listings website Zoopla.

Bellway said demand had picked up in the second half of the financial year, but revenue fell 30 per cent to £2.4bn over the 12 months to the end of July. Adjusted pre-tax profits were down almost 58 per cent to £226mn.

Honeyman said the group was expecting a “stronger spring selling season once we get through this period of politics” — and forecast home completions would rise 11 per cent to 8,500 in the year to July 2025.

Bellway said it would take longer to recover back to its 2023 levels of output, about 11,000 homes. The slow recovery in housebuilding is a headwind for Labour’s ambition to build 1.5mn new homes over five years.