HOUSEBUILDER Bellway said yesterday it will post record profits despite fears on how interest rates have affected the housing market. A trading statement from the Newcastle company also said it had sold 7,638 homes in the year to July 31 – up more than 7% from 7,117 last time. Bellway’s order book is also looking healthy at £594m, up nearly 6% from £561m at the same time last year. Bellway said the average selling price for its homes has risen 3% to £174,000. Finance director Alistair Leitch said the housebuilding industry was having to operate using incentives to sell homes, but Bellway was pleased with its performance in current market conditions. Bellway says the UK market generally is stable and despite the recent interest rate rises, its level of reservations achieved during June and July has been encouraging. Mr Leitch said: “Things are encouraging for us. We are still cautious, because summer is not a busy time for housebuilders. “It’s autumn where we see the traditional surge in sales but we have posted a good increase of 500 homes (in the year to July 31) and our target next year is 8,100. “We are seeing strong sales in Scotland, the North-East and South-East but across the board it’s an incentive-led market. “It is strange. Your heart is telling you that all the comment and economic data suggest the market should be slowing down. “But on the other hand, the figures show an excellent set of results and we have encouraging reservations too.” Mr Leitch said Bellway was anticipating one more interest rate rise but if the Bank of England goes beyond that, it could start to “stretch” affordability for homebuyers. He added: “Historically, 6% is not a high interest rate. We used to have rates up at 12% though we did not have the debt level then that we have now. “The problem nowadays is that debt levels are very high, so any increase in interest rates affects people.” Rival housebuilders have given mixed trading updates in recent weeks in the current climate of rising borrowing costs. In July, Bovis Homes warned it had seen a “recent slowdown“ in sales as hikes in interest rates began to take effect, although larger rival Barratt Developments said it had seen strong sales and reservation levels. Numis Securities predicts the firm will post pre-tax profits of around £230m for the full year, up 4% on the previous year. Shares in Bellway ended trading yesterday up nearly 4% at 1264p. | 
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