There is a resurgence in consumer confidence in the housing market, according to Bellway, as it revealed its full year trading update.

The housebuilder attributes the renewed confidence to the reduction in mortgage interest rates, a slowdown in consumer price inflation and rising wages. 

Bellway exceeded its housebuilding targets over the past year, completing 7,654 homes by 31 July. Although this was a decrease from 10,945 the previous year, it surpassed the goal of 7,500. 

The average selling price of the homes was £308,000, slightly down from last year’s £310,306 but still above projections. Overall revenue declined to £2.4bn from £3.4bn the previous year.

Bellway’s CEO, Jason Honeyman, expressed optimism regarding the new government’s initiatives to increase housing supply across the country, particularly the proposed planning system reforms, with the Labour government setting an ambitious target of constructing 1.5 million new homes over the next five years.

Bellway also emphasised that it continues to offer targeted incentives to attract buyers. The company’s forward order book increased to 5,144 homes, up from 4,411 at the same time last year, with the value rising to £1.4bn from £1.2bn.

Bellway is seeking to acquire smaller rival Crest Nicholson, which said in mid-July that it was “minded” to accept an improved offer of £720m. The companies have extended the deadline for negotiations to 20 August.

Anthony Codling, managing director, equity research, RBC Capital Markets, said: “Bellway delivered a positive full-year trading update, selling more homes at a slightly higher price than we had expected as falling mortgage rates, easing cost of living pressures and rising wages are encouraging households to buy homes. 

“Not only did Bellway end its financial year well, but it started its next one firmly on the front foot with an order book up 16% in terms of number of homes. 

“With the Bellway engine firing on all cylinders, we question whether it needs to buy the misfiring Crest Nicholson – if it ain’t broke, don’t fix it.”