London, March 24, 2026, 14:46 GMT
- Bellway lowered its operating margin target for fiscal 2026 to roughly 10.5%, down from the previous 11%. Shares tumbled almost 12% following the announcement. 1
- The builder bumped up its 2026 home-completion goal, now aiming for 9,300 to 9,500 homes, while sticking with its underlying operating profit forecast of £320 million to £330 million.
- Bellway flagged that incentives—like assistance with deposits—are still running high, and mortgage swings plus cost inflation are once again drawing attention. 1
Bellway shares slumped almost 12% Tuesday after the UK homebuilder trimmed its full-year operating margin outlook to roughly 10.5% from 11%. The move overshadowed news of a higher homebuilding target for 2026. Bellway ended up as one of the biggest losers on London’s FTSE 250 mid-cap index. 1
The spring selling season was supposed to be the turning point for UK housing demand, offering a test for recovery without squeezing margins further. But Bellway remains dependent on incentives like deposit support. Pressure’s building from several fronts: oil pushing past $100, speculation swirling around more Bank of England rate hikes, and both mortgage costs and construction inflation back under threat. 1
Bellway posted a 1.5% uptick in underlying operating profit for the six months ended Jan. 31, coming in at £159.0 million. Total revenue moved up 6.3% to hit £1.52 billion. But statutory pretax profit edged down 0.6% to £139.9 million. The board lifted the interim dividend by 9.5%, bringing it to 23.0 pence per share. 2
The company bumped its FY26 completion goal to a range of 9,300-9,500 homes, up from the 9,200 figure given back in February. Guidance for underlying operating profit stays between £320 million and £330 million. Bellway is now looking for an average selling price near £325,000, compared with the previous estimate of about £320,000. The increase comes down to the product mix, not any significant move in overall prices.
Chief Executive Jason Honeyman offered a blend of optimism and caution. Bellway is seeing stronger customer demand and higher reservations since January, he noted, and so far the Middle East conflict hasn’t had a material impact on trading. Still, Honeyman flagged renewed volatility in the mortgage market. “Serious buyers are still there, but passing traffic is starting to moderate,” he told analysts.
Incentives were the sticking point. Bellway reported they made up 4.5% to 5.0% of selling prices during the first half—an uptick from roughly 4% the previous year. Honeyman conceded that the earlier plan to pull back incentives fast enough for margin gains by 2027 now seemed “a little too optimistic.” 2
As of March 13, the forward order book had dipped to 5,311 homes with a total value of £1.55 billion, versus 5,582 units and £1.58 billion this time last year. Reservation rates from Feb. 1 came in at 0.70 per outlet each week, factoring in bulk sales — that’s down from 0.76 per outlet during the same stretch a year ago.
Bellway pointed to progress on its £150 million buyback, saying roughly £64 million was finished by March 13. The company is also winding down the Ashberry brand, planning to phase it out over the next three to four years. That move fits into a larger plan to streamline operations, reduce overlap, and keep returns intact. 2
The warning sharpened the sector’s cautious mood. Bellway became the latest after Taylor Wimpey and Vistry to signal strain from affordability and rising costs. Victoria Scholar, head of investment at interactive investor, said Bellway’s shares were now “hostage to the Bank of England’s monetary policy paralysis.” 1
The more optimistic outlook for Bellway hinges on a few things falling into place. The company stuck to its projection of hitting around 10,000 homes annually by FY28, assuming the market stays steady. The trouble comes if mortgage rates swing again, buyer numbers thin, and build-costs flare up all at once—the group might hit its sales target but see margins shrink. 2
