The housebuilder plans to reduce headcount across the group as well as potentially close its South Midlands and London partnership divisions, with its Durham detachment also facing capacity reductions, all of which Bellway has said will only affect a small amount of its workforce of around 3000.

In a statement, 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 (9th August) 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.”

The news comes as Bellway released its trading update for July 2023, which showed a housing revenue decline from around £3.5bn in 2022, to around £3.4bn in 2023.

Overall reservations fell by 28.4% while private reservations fell by 35.9% to 109 per week, compared to 170 last year.

Housing completions also declined from the previous year from 11,198 to 10,945.

However the company also reported a ‘robust balance sheet’  of £232m, down from £245.3m the previous year.

Jason Honeyman, group CEO at Bellway, commented on the report: “The backdrop of macroeconomic uncertainty and cost of living pressures affected consumer demand during the year, and given affordability remains constrained by higher mortgage interest rates, underlying trading conditions are likely to remain challenging in the near term.”

Industry members also commented on the news.

Graham Cox, founder of SelfEmployedMortgageHub.com, said: "Bellway's latest trading update illustrates the challenges housebuilders are facing in a high interest rate environment.

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“The 35.9% fall in private reservations is not surprising given the end of Help to Buy and mortgage rates around 6% for buyers with small deposits.

“Rising build costs and the increased use of buyer incentives have reduced Bellway's margins, adding to their woes.

“The problem is, for many first-time buyers, new builds are completely unaffordable and the gravy train for housebuilders has now come to a shuddering halt."

Samuel Mather-Holgate, MD at Mather & Murray Financial Ltd, added: "Bellway came into this trading period in a good state and you can see that, despite lower margins caused by massive building cost inflation, it has bought back shares at a fast pace, keeping its share price fairly buoyant.

“Its balance sheet also remains healthy — private residential reservations were a massive 35.9% down, clearly due to the pressure on interest rates and the cost of living.

“However, like other housebuilders Bellway remains confident that a change in housing policy will be a boost to the sector as will a pivot on rate policy."

Joe Garner, MD at Joe Garner Consulting, also commented: "Reservations, house sales and completions will decrease until interest rates drop and prices cool.

“Ideally, we will see an organic, controlled return to growth with interest rates stabilised around 3% to 4% and supply increased to match demand.

“Boom and bust must be replaced with an ebb and flow of supply and demand to prevent overheating followed a sharp drop in house prices."

Riz Malik, director at R3 Mortgages commented: "Housebuilders such as Bellway are grappling with the impact of 14 successive interest rate hikes, and it's expected that reservation rates will continue to be impacted — the conclusion of the Help to Buy scheme undoubtedly intensifies its challenges.

"For a positive shift in its trajectory, Bellway would benefit from government support in housing or a significant reduction in interest rates.

"Unfortunately, neither outcome seems imminent — Housebuilders should switch their focus to smaller starter homes, which this country urgently needs."