(Adds details on quarter, forecast, background and share price)
Aug 8 (Reuters) - British builder Bellway Plc expects home price growth to slow in the year ahead, hitting margins that buoyed results over recent years, sending its shares down about 6 percent in early trading on Wednesday.
Bellway said it has limited its exposure to more expensive homes across the country because of slower sales and the need for added incentives to sell them.
The company cautioned that the net inflationary boost to margins, which has augmented results over several years, is beginning to subside.
Bellway said 2018 operating margins would be about 22 percent, lower than 22.3 percent in 2017.
“The pricing environment is stable ... As the year has progressed, the rate of house price inflation has moderated,” Bellway said, adding that higher costs were still being offset by the more moderate rate of house price growth.
London’s housing market was hardest hit by the June 2016 Brexit vote, due to lower demand from foreign investors and fears around the city’s financial services industry.
Bellway expects significant earnings growth in the full year to July 31, helped by a 16 percent rise in revenue to 3 billion pounds ($3.88 billion) on higher sales and prices.
For the year, the company sold 10,307 new residential dwellings, a 6.9 percent rise - and the first time in its history that it breached the 10,000 mark.
The average selling price rose about 9.4 percent to a new high of 284,900 pounds.
Bellway has taken advantage of the government’s “Help to Buy” scheme, aimed at boosting home ownership among first-time buyers and low interest rates.
The Bank of England pushed interest rates above their financial crisis lows last week, but signalled it was in no hurry to raise them further with an uncertain Brexit on the horizon.
The company said it expects to deliver further, more moderate growth in the year ahead, with a slight higher forward order book rise of 4,841 homes at July 31, from 4,749 homes in 2017.
The stock was down 3.2 percent to 2882 pence at 0714 GMT on Wednesday, and among the top losers on the UK mid-cap index .
$1 = 0.7730 pounds Reporting by Arathy S Nair in Bengaluru; Editing by Bernard Orr