Housebuilder Bellway says its home sales have fallen 38% to 2,014 in the six months to 31 January, with the average selling price dropping from £174,800 to £160,000.
In a trading update this morning, the company said the decline in price was due to increased levels of discounting as well as a changing mix where social housing has increased to 20% of total completions in the period.
“Cash discounting, part-exchange and shared equity have been used as incentives in virtually every private sale to maintain a sales rate which has been in line with our expectations,” the company said.
“Margins continue to come under extreme pressure and could fall by more than 50% when compared to 18.1% posted in the six months ended 31 January 2008.”
At the end of the period, the company’s order book stood at £296m, compared with £580m the year before, of which 70% is contracts.
Bellway said it was focused on reducing its debt levels and was on target to reduce the year-on-year debt at 31 July by £100m to about £120m.
“The group continues to operate well within its current committed banking facilities of £402m, which were negotiated and agreed in the second quarter of 2008 and extend out in annual tranches to 2015,” the company said.
