Bellway benefits from government generosity

Across the board, homebuilders have seen their shares benefit from speculation ahead of Wednesday’s UK budget report.

On Wednesday 26 March, Bellway will be posting an interim-earnings release, and traders are likely to be eagerly awaiting its comments to forward guidance.

This weekend UK chancellor George Osborne announced the current government’s Help to Buy scheme will be extended up until 2020. The aim of the scheme is to enable those who are not on the property ladder to get a foothold without having to stump up the significant deposits that were previously required.

Many people felt that this was the largest contributing factor to the house price bubble, however the flow of European and global funds into the UK and specifically the London market has been sizable. As an example, following the introduction of France’s new tax structure, the population of French citizens now living in London would see it become the sixth largest French city if it were in France.

Unsurprisingly we have seen most of the homebuilders bounce this morning following the weekend news. Bellway, like the others, has been up over 4% during the morning session. This longer-term government support should see the share price once again challenge its 2014 high, above the 1700p level, as well as a continuation of the strong bullish trend that the shares have enjoyed over the last year. 

Bellway chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts