Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.

Bellway Reports Weaker Housing Demand Amid Higher Mortgage Rates

Bellway has warned that higher mortgage rates and rising construction costs are negatively affecting the UK housing market. The FTSE 250 housebuilder reported a slowdown in homebuyer demand during April and May, following a stronger start to the spring selling season.

According to Bellway’s latest trading update, higher mortgage rates were a key factor behind the weaker demand. Mortgage rates increased after the outbreak of war in the Middle East earlier this year, with five-year fixed-rate deals rising above 5.5% for the first time since September 2024. Although rates have since fallen to around 4.35%, they remain above pre-war levels.

Private home reservations at Bellway fell by 6.2% year-on-year to an average of 151 per week in the four months since February. The company operated from an average of 233 outlets during this period, compared to 242 a year earlier. Despite these challenges, Bellway still plans to open 40 new sites in the second half of the year.

Bellway also highlighted rising construction costs, driven by higher fuel and energy prices. The company noted that some suppliers have increased prices and added surcharges, further impacting build costs.

The value of new land contracts at Bellway fell 27% year-on-year to £363 million in the year to August, reflecting a cautious approach to land buying. The company maintained its full-year guidance, expecting to build between 9,300 and 9,500 homes and achieve a pre-tax profit of between £320 million and £330 million.

Bellway stated that the industry continues to face significant challenges, including weaker buyer demand and rising build costs. Other housebuilders have raised similar concerns, with Berkeley halting land purchases in April due to rising costs and increasing regulation.

These developments are relevant for UK letting agents and inventory clerks, as changes in housing demand and construction activity can influence rental supply and property management workloads.