Housing boom builds record profits at Bellway

Bellway, the middle market housebuilder, has defied predictions of a housing slowdown by achieving a leap in sales and profits and by promising to build more homes. Turnover in the year to July jumped 23.4 per cent from £773m to £954m as Bellway sold more homes - 6,278 compared with 6,044 in the previous 12 months - at higher average prices, the group announced yesterday.

The cost of a Bellway home rose from £120,800 to £149,700. Its chief executive John Watson said only 8 per cent of the increase was due to house price inflation. The rest was down to building larger properties of higher quality.

Mr Watson said the key was to maintain a wide geographic spread and Bellway has stepped up building further north just as the regions have played catch up with London. The new South-west division will contribute to profits in the current financial year and an experienced manager has been appointed to lead a new division in the Thames Gateway area around Barking, an area identified by the Government as ripe for development.

Mr Watson said: "With high employment levels, low interest rates and household formation [rising] above the rate of new housing supply, the market place has remained buoyant."