ii view: housebuilder Bellway predicts further growth in 2026

Full-year trading update to 31 July

• Private reservations per week and including bulk sales up 11.8% to 0.57 (2024: 0.51)
• Build completions up 14% to 8,749 homes
• Average selling price of around £316,000, up from 2024’s £307,909
• Revenue up 17% to £2.76 billion
• Net cash of £42 million, improved from 2024’s net debt of £10.5 million 

Guidance:

• Continues to expect underlying 2025 operating profit margin approaching 11%, up from 2024’s 10%
• Expects build completion for the 2026 year ahead of 9,200

Chief executive Jason Honeyman said:“Bellway has delivered a solid performance despite ongoing headwinds for our industry. There was good growth in volume output and an improvement in underlying margin, which are set to drive a strong increase in profits for FY25. 

“We have a high-quality land bank and the operational capacity across the group to support our plans to deliver long-term volume growth. During the year, we have made excellent progress with refreshing our approach to capital efficiency across all our divisions, and I remain confident that we can drive increased cash generation and shareholder returns in the years ahead.”

• Invest with ii: Top UK Shares | Share Tips & Ideas | Open a Trading Account

ii round-up:

Bellway (LSE:BWY) today detailed increased annual build completions and expected revenues with the mid-sized housebuilder remaining optimistic for further growth during the 2026 year ahead. 

A 14% rise in build completions to 8,749 homes and an increased average selling price of around £316,000 (2024: £307,909) are expected to push 2025 revenues up 17% to £2.76 billion. Forward sales of 5,307 homes by the year end support expected build completions of 9,200 for the 2026 year ahead, with improved cash generation underpinning shareholder returns.

Shares for the FTSE 250 housebuilder rose 1% in UK trading having come into this latest news down around 2% so far in 2025. That’s like rivals Persimmon (LSE:PSN) and Berkeley Group Holdings (The) (LSE:BKG). The FTSE 250 index is up 6% year-to-date. 

Headquartered in Newcastle, Bellway operates across 20 regional divisions throughout the UK. Customer reservation for non-social homes improved to a rate of 0.62 in the second half. That’s up from 0.51 in the first half, although with solid spring reservations followed by softer summer demand. 

Build cost inflation of low single digits throughout the 2025 financial year supports management’s ongoing expectation for an underlying profit margin of close to 11% - up from 2024’s 10%. 

Net cash held of £42 million as of 31 July is up from net debt of £10.5 million a year earlier with management scheduled to outline targets for cash generation and shareholder returns alongside annual 2025 results on 14 October.  

Broker UBS reiterated its ‘buy’ stance on Bellway shares.

ii view:

Started in 1946, Bellway today employs around 3,000 people directly and focuses on providing traditional family housing outside London and apartments within London. Group brands are Bellway, Bellway London and Ashberry. The Ashberry brand is used on just over a tenth of active outlets, and typically on larger sites alongside the core Bellway brand, offering a choice of layouts and elevational treatments from the standard house type.   

For investors, US trade tariffs announced in early April now mean broad global economic uncertainty, including their impact on inflation and therefore future interest rate policy. Uncertainty regarding UK government finances could lead to tax rises at the next Budget. Stretched UK government finances now offer reduced room for sector assistance, as seen in the past, while Bellway has pointed to slow local authority action under eased government planning regulations.  

• Stockwatch: can UK shares remain strong given US tariff impact?
• Watch our video: two value buys – and why banks are still a bargain
• 10 hottest ISA shares, funds and trusts: week ended 8 August 2025

To the upside, customer demand has broadly improved with a recent cut in UK interest rates potentially supportive. Eased planning regulations under the current government should assist over the medium to longer term. The previous acquisition of Redrow by Barratt Developments could yet see further sector consolidation occurring, while the City is currently forecasting a dividend yield in the region of 3% for 2026 and 4% for 2027. 

In all, and while exposure to economic sensitivities should not be ignored, a consensus analyst estimate of fair value sat at over £32 per share offers room for cautious optimism. 

Positives: 

Hoped-for interest rate cuts

Easing planning regulations 

Negatives

Uncertain economic outlook

Potential UK government tax rises

The average rating of stock market analysts:

Buy