Low cost housebuilder MJ Gleeson has seen a small rise in the number of properties it has sold but says sales rates over the past six months have been sluggish.
The Sheffield-based developer gave an update on trading in the year to the end of June in which it said 1,772 homes had been sold, an increase of 2.8% on 2023’s numbers. Operating profits within the firm’s Gleeson Homes division are expected to be £30m, a drop from 2023’s £35m, and a further drop from 2022’s £51.2m, though in line with bosses expectations.
Gleeson said sales over the last six months had been steady but “less vigorous than expected” owing to buyers hesitating over possible mortgage rate reductions. The firm’s board expects rates to fall and therefore demand to strengthen into 2025.
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And the timing of this month’s General Election was blamed for the deferral of a significant land disposal which is now expected to be completed in the firm’s 2025 financial year. Operating profits within the land division – which was said to have seen continued challenges from the planning system – are expected to be around £2m, significantly down on 2023’s £7.5m and below market expectations.
CEO Graham Prothero said: “We have delivered a solid overall performance with Gleeson Homes exceeding expectations in what has been a challenging year. We are making progress against our key strategic priority of significantly scaling up our operations over the medium-term. Looking ahead, we are anticipating an increase in demand for new homes as interest rates begin to come down and consumer confidence returns. We also expect Gleeson Land to complete on a number of significant land disposals in the months ahead.
“The agreement of our first partnership site is an exciting development. We are encouraged by the number of discussions currently underway with further potential partners and look forward to updating the market on progress in due course.
“We also welcome the Chancellor’s comments regarding mandatory housing targets, planning reform and other measures to increase substantially the supply of new homes. There is much to do if aspiration is to become reality, but the determination that we have seen since the election to get things done marks a positive change in approach. Gleeson is ready to play its part in delivering much needed affordable homes.”
Original artice – https://business-live.co.uk/all-about/yorkshire-humber
