Bellway's shares fell 14 per cent on Tuesday after its chief executive, Jason Honeyman, warned the UK housing market faces further pressure. The Newcastle-based housebuilder reported its half-year margin slipped to 10.5 per cent, down from 11 per cent a year earlier, and expects this pressure to persist through 2027. Honeyman attributed the squeeze to higher costs, increased use of incentives, and a shift towards bulk sales, stating the Middle East conflict and potential higher interest rates add significant strain. Bellway expects trading to soften in spring as higher mortgage rates impact buyer demand, though it noted no immediate trading impact from the conflict as many buyers already have fixed rates.

Bellway also highlighted its operational performance, building 4,702 homes in the first half – up from 4,577 last year – and projecting underlying operating profit of £320-£330 million for the year. However, the company's cautionary outlook underscores the sector's broader challenges. Earlier this month, Vistry shares fell after announcing margin pressure and the departure of its executive chair, reflecting a sector grappling with sustained cost inflation and muted demand.

The UK housing market has called on the government to stimulate demand through measures like a stamp duty holiday or expanded help-to-buy schemes. Bellway's CEO expressed disappointment at the lack of support from the Labour government, warning its target of 1.5 million new homes by the end of the parliamentary term is now unachievable without such interventions.