UPDATE 1-UK's Bellway staves off concerns on housing demand easing

(Adds CEO comment, background)

Feb 8 (Reuters) - UK homebuilder Bellway on Tuesday
said it was still on track to deliver 10% annual output growth,
helped by persistently strong demand, staving off concerns that
a housing market boom had started to fade amid a growing
cost-of-living squeeze.

Cheap loans and government support measures have propped up
the under-supplied UK housing market during the pandemic,
although the demand environment faces fresh challenges from
potential rise in mortgage rates and deepening inflationary
pressures on the consumer.

Last week, the Bank of England raised interest rates for the
second time in two months, with nearly half its policymakers
asking for a bigger increase to contain rampant price pressures,
a policy move that could indirectly weaken demand in the housing
market.

"Notwithstanding the recent, modest rises in interest rates
and cost-of-living inflationary pressures, our mid-market
product remains affordable in a historical context," Chief
Executive Officer Jason Honeyman said in a trading update.

Bellway said it continues to expect completion of 11,100
homes for the full year to July 31, 2022, and around 12,200
homes in financial year 2023.

The FTSE mid-cap company, which builds houses
ranging from one-bedroom apartments to six-bedroom family homes
and luxury penthouses, said its order book stood at 1.94 billion
pounds ($2.62 billion) as of Jan. 31, while average selling
price rose 2.8% to 311,800 pounds.

Bellway's bigger rivals Persimmon and Taylor Wimpey
last month forecast strong demand, while smaller firms MJ
Gleeson and Vistry reported healthy trading on
robust demand. Countryside Properties unexpectedly
reported a weak quarter.
($1 = 0.7395 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; editing by
Milla Nissi)