UK Housebuilder Bellway Considers Closure of Two Divisions Amidst Slump in Demand
One of the largest housebuilders in the UK, Bellway, is facing a decline in demand from new buyers and is considering widespread redundancies and the closure of two regional divisions. The company is currently consulting on the proposals, which would involve shutting down its London partnerships and South Midlands divisions. This move could result in 90 employees losing their jobs out of Bellway’s 3,000-strong workforce.
In a statement, Bellway acknowledged the current market conditions that have led to a slowdown in the sales market and reduced output for house building. As a response, the company has announced plans to make structural changes across its business, including the potential closure of two operating divisions. Sites from these divisions would be transferred to other divisions, and there would also be a reduction in capacity in a third division. Additionally, a limited number of roles across the business may be affected. Bellway has already begun the process of consulting with those who may be impacted by these changes.
This development is indicative of the ongoing slump in the housebuilding sector, which is grappling with high interest rates and a cost of living squeeze that is dampening demand. The end of the government’s Help to Buy scheme in England is also weighing on the sector. In June, Bellway reported a significant decline in its reservation rate for the four months leading up to June, with only 190 homes reserved compared to the same period the previous year. The company’s order book value also dropped from £2.4bn to £1.7bn.
Bellway’s situation is not unique, as other major housebuilders have also been affected by the challenging market conditions. Taylor Wimpey recently announced plans to cut jobs in order to achieve annual savings of £20m, while Barratt revealed it would build 20% fewer homes in 2024. Berkeley, another prominent housebuilder, expects its annual sales to decline by a fifth.
Despite the difficulties faced by the housebuilding sector, Bellway remains committed to adapting its business to the changing market conditions. The company’s proposed structural changes aim to optimize its operations and ensure long-term sustainability.