Newcastle-based housebuilder Bellway plc said on Friday uncertainty in the run-up to the UK general election In July may temporarily impact its business, but overall it was confident that the next government would back increased homebuilding. 

In a trading update covering 1 Feb to 2 June, the company said customer demand benefitted from an improvement in affordability, driven by a moderation of mortgage interest rates and consumer price inflation, combined with an increase in wages. 

It shares rose 1.4% on the London Stock Exchange.

It said it was on track to complete 7,500 homes for the year, down from 10,945 homes in the previous year, with a reduction in underlying operating margin of at least 600 basis points from the prior year. It said the average selling price of one of its houses is now expected to be around £305,000, down from  £310,306 last year. 

“If market conditions remain stable, we are well-positioned to return to growth in financial year 2025,” the company said. 

“We remain alert to future potential risks to customer demand and cost inflation, and in the coming weeks there may be a temporary impact to trading as political campaigning continues. Notwithstanding this, the outlook is improving and there is cross-party political support for increasing the supply of housing across the country. The long-term housing market fundamentals remain positive, and we are hopeful these will be bolstered by greater clarity over planning and housing policy beyond the upcoming General Election.”

Jason Honeyman, Group Chief Executive, said: “We have been encouraged by ongoing healthy levels of customer interest and combined with the strength of our outlet opening programme, we continue to expect a year-on-year increase in the forward order book at 31 July 2024. As a result, Bellway remains in a strong position to return to growth in financial year 2025.”

The company’s next scheduled trading update, covering the financial year ending 31 July 2024, is on 9 August.