Bellway, one of Britain's largest housebuilders, believes the government's new Your First Home initiative could increase its annual housing production by approximately 10%, according to comments made by the company's chief executive following strong financial results.
The scheme, launched by Prime Minister Andy Burnham earlier this month, represents a targeted approach to help-to-buy support for first-time buyers. Unlike previous iterations, it incorporates household income limits to exclude higher earners and property price caps to restrict purchases to modest homes. Prospective buyers will receive a government-backed equity loan covering 20% of the purchase price, with a minimum deposit requirement of just 2.5%.
Jason Honeyman, who has led Bellway since 2017, acknowledged that while the programme offers substantial potential to support first-time buyers, it may create short-term market headwinds as some purchasers delay decisions pending the scheme's formal launch. Chancellor John Healey is expected to announce full programme details, including the launch date, during the Autumn Budget on 28 October 2026.
How could the scheme affect Bellway's output?
Honeyman stated that the initiative could enable Bellway to return to annual completions of 10,000 homes, a target achievable from the 12-month period beginning next September at the earliest. Drawing on the company's experience with previous help-to-buy programmes, he projected that the new scheme has the capacity to drive volume growth of around 10%, which combined with broader market recovery could restore the builder to its 10,000-home annual target and achieve a 15% return on equity.
Currently, Bellway is targeting between 9,000 and 9,400 homes in the current financial year, representing a decline from 9,695 homes completed in the previous year. This reduction reflects a smaller order book and persistent challenges in customer demand, compounded by construction cost inflation running between 3% and 4%.
What is Bellway's current financial position?
The company exceeded analyst expectations with revenue of £3.16 billion for the year to 31 August 2026, a 13% increase from the prior year. Underlying profits before tax rose 5.7% to £305.7 million. However, the company's underlying operating margin contracted to 10.1% from 10.9%, as cost pressures outpaced revenue growth.
Bellway's forward order book stood at 4,981 homes valued at £1.4 billion, down from 5,285 homes worth £1.5 billion a year earlier. The company expects average selling prices to remain flat over the coming year at approximately £325,000. The builder's land bank comprised 94,666 plots at 31 July 2026, with 63% of plots in its detailed planning permission land bank priced at £400,000 or below, positioning the company well for the Your First Home scheme's price restrictions.
In a sign of confidence, Bellway announced a £150 million share buyback programme for the financial year 2027, with the first tranche increased to £75 million from £50 million. The company also reported adjusted operating cash flow of £868.6 million, up 36%, and year-end net cash of £157.7 million. The total dividend rose 7.1% to 75p per share. Despite these positive results, Bellway shares rose just 2% on Tuesday and remain down by more than a quarter so far this year.
Which builders will benefit most from Your First Home?
The Your First Home scheme is expected to provide a significant boost to most major housebuilders, including Persimmon, MJ Gleeson, Taylor Wimpey and Bellway. However, the upmarket builder Berkeley Group, which focuses on London where property prices exceed the scheme's anticipated caps, and Vistry Group, which has shifted its focus towards affordable and social housing, are unlikely to derive substantial benefit from the initiative.
The scheme applies exclusively to England and targets prospective first-time buyers seeking to purchase new-build flats or houses. The proposed scheme's final developer fees, funding arrangements and regional price caps were still unresolved at the time of Bellway's results announcement, with these details expected to emerge when the Chancellor sets out the full framework in the Autumn Budget.
What happens next?
The Autumn Budget on 28 October 2026 will be the pivotal moment for the Your First Home scheme. Chancellor John Healey is expected to announce the complete programme rules, including launch timing, regional price caps, developer fee structures, and funding arrangements. This announcement will clarify the scheme's scope and allow builders and prospective buyers to plan accordingly.
