Builders' Merchants News

Bellway puts cost pressure on suppliers

Published:  20 October, 2010

NEWCASTLE-UPON-TYNE: Bellway intends to cut around £2400 from each home it builds by putting pressure on its suppliers.

The housebuilder said it was achieving reductions in build costs, especially on plastering, foundation and road and sewer works.

Some of this gain has been absorbed by rising timber and steel prices, but cost falls helped to deliver gains in operating margin.

John Watson, the company's chief executive said: "These cost movements do not affect every site but are highlighted when existing developments have been re-drawn and re-tendered.

"On these sites, cost savings of around £2400 per unit have been identified and the divisions will now need to work hard to deliver these savings as labour rates respond quickly to workload increases."

Watson also warned that the cost implications flowing from new technology, especially in relation to CO2 emissions, were difficult to predict and would remain a focus for future cost control.

Bellway remained cautious about the outlook for housing. Sales in the early part of what is traditionally an active autumn selling period have picked up, albeit only slightly, following the usual summer lull as potential homebuyers awaited the outcome of the Government spending review.