Yorkshire affordable homes specialist MJ Gleeson has posted soaring revenues and profits driven by demand from first time buyers.
The Sheffield headquartered company trades as Gleeson Homes and has developments across Yorkshire, Northumberland, County Durham, Derbyshire, Lancashire, Greater Manchester, Tyne and Wear, Teesside, Shropshire, Lincolnshire, Merseyside.
The company has posted results for the six months ended December 31 2021, showing a 21.7% increase in sales to £173.5m, and a 21.7% in pre-tax profit to £24.7m. Operating profit also increased 9.8% to £22.5m.
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During the period it sold 932 homes, up 14.9% on the pre-Covid half-year to December 31 2019, but down 2% on the 951 homes built in the comparable period last year which was boosted by delayed completions carried over from the first pandemic lockdown.
The firm said 55% of homes sold had been bought through Help to Buy, down from 69% last year, but chief executive James Thomson, says it is on track to deliver its milestone target of 2,000 homes this financial year, buoyed by strong demand for affordable houses.
The average selling price was up 14.7% to £161,200 and eight new sites opened in the period, with a further 17 expected to open in the second half of the year.
Meanwhile it has a strong land pipeline of 16,242 plots, up from 15,863 in June 2021.
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Mr Thomson said the demand shows “no sign of abating” and the firm is helping young house hunters out of the “renting trap”.
He said: “The continued strong demand for our homes - which shows no sign of abating - demonstrates that our commitment to building high-quality, low-cost homes is more relevant today than ever.
"By building high-quality, low-cost homes, Gleeson is truly changing people’s lives by offering young first time buyers a way out of the renting trap and into first time home ownership. Three out of four of our customers are first time buyers and more than half of our buyers are key workers.
“Demand for our homes is underpinned by the affordability of the houses we build for a market that has been chronically underserved for decades.
"Although interest rates are widely expected to rise over the course of this year, they are expected to remain historically low. Moreover, mortgage availability continues to improve as lenders offer more high loan to value products.
"In consequence, a Gleeson home will continue to remain within the reach of a couple earning the National Living Wage and without any need for Help to Buy support.
"The cost of owning a Gleeson home is significantly lower than the cost of renting and will remain so even with modest interest rate rises.”
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He added: “Meanwhile, a focus on investing in our people, organisational structure, training and processes means that the business, supported by a robust financial position, is operationally and structurally very well positioned to achieve further controlled growth.
"We expect to announce our next medium-term strategic targets at the time of the full-year results.
“Working in cooperation with local and national government to ensure the continued delivery of low-cost affordable homes for first time buyers, we can look to the next stage of the Group’s development with confidence.”
MJ Gleeson's latest results comes after Bellway said it had seen a record number of new homes being completed, defying wider economic conditions to remain strong.
Meanwhile Barratt Developments said it is on course to build a growing number of homes in the coming months after putting out strong half year results.