Revenue surges, soaring prices and a drop in output

Bellway report a boost, while TopHat tip to a loss

The week started brilliantly for volume housebuilder Bellway, who reported a surge in revenue to over £3.1bn and a record forward sales position, as well as completing 10,138 homes in the year to the end of July 2021.

Bellway CEO Jason Honeyman reflected on the 41% increase in revenue, stating: “This positive recovery has been achieved through the hard work and dedication of our colleagues, subcontractors, and supply chain partners, while maintaining the high quality of our product and making further improvements in the service we offer our customers.”

Not such positive news, however, for modular housing manufacturer TopHat, who reported a pre-tax loss of £21.3m in the year to the end of October 2020, on a turnover of £6.3m. It doesn’t seem to be worrying Chief Executive Jordan Rosenhaus, though, who said: “The pipeline is building strongly, giving the board the confidence to progress planning for a second factory, which will have a capacity of over 3,000 homes.”

First Homes launched amid soaring house prices

Meanwhile, the Ministry of Housing, Communities and Local Government announced this week that housebuilders can bid for a share of £150m to deliver their First Homes initiative. These units are aimed at first time buyers and key workers, and will be sold at a market discount of at least 30%.

An improvement in affordability would be welcome to most, as highlighted by Lloyds’ latest report. The cost of an average UK city home now stands at 8.1 times average earnings, having increased by 10.3% over the past year. The most affordable city is Londonderry, with Winchester being the least affordable, with average house prices at a whopping 14 times earnings.

Materials and labour shortages stifle construction output

The ongoing material supply crisis and rising shortages in labour have combined to drive a decline in construction output in June, dragging the industry below the February 2020 pre-pandemic high, according to the ONS.

Construction output fell by 1.3%, or £178m, mostly due to a decline in repair and maintenance work. The ONS said that responses to its survey suggested that a shortage of construction products have contributed to price rises, with inflation set to continue until the end of the year.

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