UPDATE 2-British builders Bellway, Modwen pin hopes on sustained demand

* Bellway, St Modwen see jump in annual completions

* Shares in homebuilder Bellway rise about 3%

* St Modwen sees up to 25% surge in 2021 completions
(Adds St Modwen outlook, share movement, background)

By Aby Jose Koilparambil

Feb 9 (Reuters) - British midcap building firms Bellway
and St Modwen Properties painted a rosy picture
before the crucial spring home-buying season as demand improved
steadily after initial COVID-19 disruptions.

The companies joined bigger rivals Barratt and
Taylor Wimpey in providing a robust outlook, sending
shares in the sector higher. Bellway led with a 3% gain.

House building has been a bright spot for Britain's economy
as buyers have taken advantage of low interest rates and a
temporary tax break. Appetite for bigger homes suitable for
remote working has also driven demand.

Speedy vaccination rollout and Britain exiting the European
Union have helped reduced uncertainty in the market.#

Newcastle-based Bellway, which builds everything from
one-bedroom apartments to six-bedroom family homes and luxury
penthouses, forecast a surge in the number of homes it would
deliver in its financial year to July 31, after record
first-half volumes.

Bellway said it expected to deliver 9,800 homes this
financial year, compared with 7,522 a year earlier.

The company said the number in the six months to Jan. 31
rose 6.3% to a record 5,656 units as it raised its full-year
completions outlook for the second time in three months.

"While uncertainty remains in the wider economy, the
underlying demand for good quality new homes remains robust,"
Chief Executive Jason Honeyman said.

Shares in St Modwen, which caters to industrial and
residential sectors, rose 1.4% even though the company swung to
an annual loss as it forecast a jump of up to 25% in home
completions in 2021.

The latest lockdown imposed in January and the March 31
deadline for Britain's relief on stamp duty, a tax on property
purchases, have threatened to hamper prospective buyers'
purchasing power.

British house prices fell last month for the first time
since May as a boom in activity late last year started to lose
steam.

($1 = 0.7256 pounds)
(Reporting by Aby Jose Koilparambil and Muvija M in Bengaluru;
Editing by Tomasz Janowski and Edmund Blair)