By Aby Jose Koilparambil and Suban Abdulla
(Reuters) -British homebuilder Bellway (LON:BWY) Plc on Friday said cuts in home-loan rates had eased affordability concerns and improved booking rates in recent weeks, although it remained "mindful" of future risks to customer demand and cost inflation.
There have been signs of improvement in Britain's housing market in recent weeks, helped by easing mortgage rates, after subdued demand for most of last year, but the Bank of England's delay in cutting interest rates has kept builders cautious.
Reflecting the green shoots of recovery in the sector, British lenders in December approved the most number of mortgages since June, while UK house prices rose more than expected in January.
"While the economic backdrop remains uncertain, the gradual reduction in mortgage interest rates through the first half has eased affordability constraints," CEO Jason Honeyman said in a statement.
Bellway said it opened 34 new sites in the first half to Jan. 31 and planned to open more than 40 in the second half as customer demand builds.
The Newcastle-based firm said forward sales - a key industry metric which gauges housing demand - stood at 3,970 homes, as of Jan. 31, down from 5,108 units a year earlier.
"The market should be reassured that trading in January has improved significantly and, if sustained, looks supportive for a return to volume growth in FY25," analysts at Investec said in a note.
Shares in Bellway, which have gained 24% in the last three months, traded down 1% to 2,784 pence.
Also hoping to capitalise on any sustained recovery, Britain's biggest homebuilder Barratt, on Wednesday announced it will buy its smaller rival Redrow (LON:RDW), and said underlying demand for new homes remained strong.
But some housebuilder's have expressed concerns over their near term prospects.
Taylor Wimpey (LON:TW) and Bellway's mid-cap peer Persimmon (LON:PSN) pointed to improving conditions but were tight-lipped on their profit outlook for the current financial year, while Crest Nicholson (LON:CRST) flagged market challenges.