Help To Buy scheme boosts Bellway home sales

The Government's Help To Buy scheme has accounted for a quarter of all the new homes sold by Bellway in the past two months.

The housebuilder has been averaging 160 sales a week since February - up 31 per cent compared with last year - and sales have strengthened further still since the launch of Help To Buy on April 1.

The runaway start to the scheme, which offers equity loans of up to 20 per cent on new home purchases, has sparked worries over a potential bubble as demand runs ahead of supply. Industry estimates suggest 4000 sales backed by the initiative in the first two months alone.

Bellway's management were quick to scotch talk of a bubble - "I don't believe so," said chief executive Ted Ayres - but the firm's average selling prices are at an all-time high of £200,300. However, Bellway puts this down to a shift away from building flats to houses and a greater emphasis on buoyant southern markets, where prices have been "modestly above" hopes.

The firm has already hit its target of 5 per cent growth in sales volumes for the year to July, and is now expecting a 7 per cent rise for the full year.

Finance director Keith Adey said that Bellway expects "at least a similar level of growth" next year.

London accounts for about 20 per cent of its sales with sites in Hackney, Tower Hamlets, Haringey and Greenwich, but Help To Buy has been more evident outside the capital where markets are less buoyant, Bellway said.

The company, meanwhile, remains reluctant to ramp up volumes significantly as a result of the drive.

Adey added: "We're not gearing up the business significantly as a result of Help To Buy. With any Government-backed initiative, it will have a limited lifespan, so you can't have a strategy based on it being around forever."

Bellway has previously avoided shared equity schemes where both the builder and the Government provided loans, for fear of tying up its balance sheet. However, the loans under Help To Buy come solely from the Government.

Numis analyst Chris Millington said: "Use of Help To Buy has accelerated reservations to a greater extent than peers, given its previous cautious stance on using shared equity."