UK's Bellway sees 10% volume lift from first-time buyer scheme

By Simone Lobo

Oct 13 (Reuters) - Bellway warned on Tuesday of lower home sales this fiscal year on rising mortgage rates and cost pressures, but said Britain's first-time buyer support scheme should help drive volumes back to 10,000 homes by fiscal 2028.

Shares of the residential property developer, which have lost more than 27% of their value so far this year, rose 3.9% on Tuesday.

The 'Your First Home' scheme, aimed at helping first-time buyers in England onto the property ladder, was announced last month to spur demand and propel new home construction activity.

Shares in Bellway had rallied on the news, but have since erased those gains as the market awaits further details from finance minister John Healey's October 28 budget.

"Based upon our past experience with Help to Buy, the new scheme has the potential to boost volumes by around 10% and with the market recovery, provide a path back to at least 10,000 homes a year and the return on equity of 15%," CEO Jason Honeyman told analysts in a post-earnings call.

Bellway last saw home completions above 10,000 in fiscal 2023, when the scheme's predecessor "Help to Buy" ended.

Honeyman said the new scheme, which is expected to have an income cap, will not "supercharge profits" due to its targeted nature.

The company is targeting completions between 9,000 and 9,400 in fiscal 2027, down from 9,695 in fiscal 2026.

It also expects underlying operating margins to be lower in 2027 due to buyer incentives and cost pressures linked to the Iran war.

"The hope with the scheme is that it will make new build properties relatively more attractive versus the existing home market, allowing the industry to reduce its incentives and make it economic," said Peel Hunt analyst Sam Cullen.

The company reported a forward order book of 4,981 homes as of October 2 this year, compared with 5,285 homes as of October 5, 2025.

Cullen said the order book is likely to have been affected by first-time buyers, who account for about a third of Bellway's volumes, waiting for details on the scheme.

(Reporting by Simone Lobo in Bengaluru; Editing by Sonia Cheema and Xevi Fontdegloria)