UK homebuilders boosted by rate cut and promise of planning reforms

Aug 9 (Reuters) - Homebuilder Bellway joined larger rivals on Friday in offering an upbeat assessment of the sector's prospects after the Bank of England cut its benchmark lending rate and the new Labour government promised planning reforms.

Bellway said buyer confidence was improving after a drop in mortgage rates.

It comes after rivals Persimmon and Taylor Wimpey also forecast annual housebuilding numbers towards the upper end of their guidance range.

"The UK housebuilding sector is, with one voice, sharing the view that the new Labour government has made a good start in trying to fix the UK's broken housing market," RBC Capital Markets analyst Anthony Codling told Reuters.

The sector still faces some major challenges.

Many younger potential buyers remain priced out of the market, while changes to planning rules face challenges from environmental campaigners and will take time to implement.

Persimmon has received detailed planning approvals for about 1,000 plots after the government took office in July out of the 6,000 approvals they have received so far in 2024, it said.

In June, Berkeley, which focuses on redeveloping industrial land, became the first homebuilder to boost outlook in more than two years, citing "good enquiries".

Consumer confidence had been boosted by the Aug. 1 interest rate cut and easing inflation, Bellway said after posting a smaller-than-expected fall in annual revenue.

Barratt, another key industry player, reports full year results on Sept. 4. Last month, it reduced its 2025 homebuild targets by 7%. Analysts and investors will be looking to see if its outlook has improved since then.

Taylor Wimpey reported half-year results a day before the Bank of England rate cut.

At that time, it said planning reforms outlined by the new government could be "key to unlocking future years' land supply."