Bellway to shut two divisions amid market ‘slowdown’

Listed housebuilder Bellway is to shut two divisions as part of a major restructure launched in response to the weakening housing market.

The £3.54bn turnover firm told staff yesterday that it was commencing a consultation on redundancies following a decision to shut the firm’s South Midlands and London Partnerships divisions, and scale back its Durham business.

Bellway, which plans to transfer existing live sites in the divisions to be shut into neighbouring businesses, said it will also reduce a “limited” number of roles across the wider business.

The firm, which employs around 3,000 staff, declined to put a figure on the number of roles at risk, or say how much it expected to save via the restructure, however a source close to the business distanced the firm from reports that 90 jobs were expected to be lost in total. The same source said only that the number of roles cut would be a “single digit percentage drop” on the current 3,000-strong workforce.

Bellway is due to report basic end of year figures in a full year trading update to the City tomorrow, in which further details of the restructure are likely to emerge.

The cuts come after a significant weakening in the housing market in recent months since a resurgence in mortgage rates from late spring. Redrow last month said it was shutting two divisions in response to declining sales, while Taylor Wimpey this month said profit had fallen 43% in the first half of the year. Barratt has said it expects a drop of up to 23% in completions next financial year given the state of the market.

Bellway, which reported profit of £304m on the sale of 11,198 homes in 2022, operates across the UK from 22 regional divisions. At its most recent trading update, in June, the firm said that it had seen “sustained improvement in sales demand through the spring selling season”, but since then conditions have worsened as interests rates have risen.

A spokesperson for Bellway said: “In response to current market conditions which have caused a slowdown in the sales market and a reduced output for house building, we have today announced proposals to make some structural changes across our business.

“This includes the potential closure of two of our operating divisions, with sites being transferred to other divisions, a reduction in capacity in a third division and a limited number of role reductions across the business.

“A process of consulting with those potentially impacted has begun”.