Bellway, the FTSE 100 housebuilder, is targeting fewer completions as mortgage affordability pressures and economic uncertainty continue to constrain buyer demand.
It is now targeting 9,000 and 9,400 new homes in the current financial year, down from 9,695 in the year to July, investors were told in commentary alongside its prelims.
The reservation rate in the nine weeks since 1 August ran at 0.50 per outlet per week, marginally below the 0.51 recorded in the same period a year earlier.
The forward order book at 2 October stood at 4,981 homes valued at £1.44 billion, compared with 5,285 homes worth £1.53 billion a year ago.
The underlying operating margin is expected to fall further in the new year as build cost inflation, elevated sales incentives and a higher proportion of bulk sales weigh on profitability.
However, the group said improving land quality and cost efficiencies would support a recovery beyond 2027.
Despite the cautious near-term tone, the full year results for the year to 31 July 2026 were solid.
Total completions rose 10.8% to 9,695 homes at an average selling price of £324,404, driving a 13.6% increase in revenue to £3.16 billion.
Underlying operating profit grew 5.6% to £320.6 million, though the underlying operating margin dipped to 10.1% from 10.9%, reflecting residual build cost inflation and higher incentive usage.
The standout number was cash flow, with the adjusted operating number surging 36% to £868.6 million, driven by tighter management of work-in-progress and improved capital efficiency.
The group ended the year in a strong financial position, with net cash of £157.7 million against £41.8 million a year earlier and adjusted gearing, including land creditors, of just 3%.
The board has proposed a total dividend of 75p per share, up 7.1%, and announced a further £150 million share buyback programme for the current year, taking combined dividends and buybacks across the two years to around £450 million.
Chief executive Jason Honeyman said Bellway had the financial strength, land bank and operational capacity to accelerate when market conditions improved.
And he welcomed the government's proposed Your First Home scheme as having the potential to provide meaningful support for first-time buyers.
