After drifting steadily lower for the last five years, it looks as though the FTSE 350 Household Goods & Housebuilders index has turned the corner this year.

Admittedly, sentiment took a big hit from the MJ Gleeson (GLE) profit warning on 3 June, but it recovered a week later thanks to an upbeat report from rival builder Bellway (BWY) on 10 June.

Gleeson blamed ‘headwinds’ in the new-build market and a lack of disposal gains for lowering its full-year margin and earnings outlook, saying the pace of the recovery in sales wasn’t enough to offset increased build costs, flat selling prices and the continued need to use incentives.

In contrast, Bellway said it had enjoyed ‘robust’ trading over the Spring selling season and an increase in reservation rates this year compared with the second half of 2024.

As a result, the Newcastle-upon-Tyne developer lifted its annual completion forecast and its estimate of average selling prices, with chief executive Jason Honeyman assuring investors the firm was ‘on track to deliver strong volume growth in volume output and profits in the full financial year’.

Bellway noted consumer confidence had increased, and ‘improved affordability’ was creating what it called a ‘sustainable’ rise in private reservations, while the use of incentives was stable and build-cost inflation was in the low single digits.

Depending on which building society’s survey you look at, the average UK House price is either marginally lower (Halifax) or marginally higher (Nationwide) since the start of the year, while transaction levels spiked in March as buyers brought forward their purchases to avoid increased stamp duty costs.

The Nationwide says mortgage approvals data ‘suggests market activity appears to be holding up well following the end of the stamp duty holiday, and despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers remains supportive’.

In turn, the Halifax says the market ‘appears to have absorbed the temporary surge in activity over spring, which was driven by the changes to stamp duty,’ and while affordability remains a challenge, with house prices still high relative to incomes, lower mortgage rates and steady wage growth ‘have helped support buyer confidence’.

The key takeaways from both societies’ recent surveys, for us, are that low unemployment, rising earnings, strong household balance sheets and the prospect of lower borrowing costs as the Bank of England cuts interest rates should mean higher prices and transaction volumes in the second half of 2025, which will be good for the new-build market as well as the existing-home market.

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