Low cost housebuilder MJ Gleeson has suggested there could be a turning point in the market following this week's Autumn Statement.
The Sheffield-based developer and land promoter said that while it was too early to call a recovery, it was encouraged by the Chancellor's package and expected it to result in returned consumer confidence. In a trading update to the London Stock Exchange Gleeson laid bare the disastrous impact of September's mini budget on the housebuilding industry, saying that in the last six weeks its cancellation rate had reached 41% and net reservations down.
But the historic firm said it now expected to see an improved outlook for interest rates and better mortgage availability for potential customers. Despite the recent challenges, in September, Gleeson reported record revenue and profits for the year to the end of June 2022.
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The update went on to say: "The average selling price on new reservations since the start of the financial year was £186,500, an underlying 9% higher than the same period last year. Despite these higher prices, our homes remain attractive to first time buyers and a couple on the National Living Wage can still afford to buy a Gleeson home on any one of our development sites.
"Furthermore, we are now seeing interest from customers who might previously have considered a more expensive property built by another developer but who, in the current environment, are attracted by Gleeson's more affordable price points. Land continues to be available at sensible prices and the pipeline remains strong. Gleeson Homes has a land pipeline of 16,484 plots with a gross development value of £3.1 billion, of which 8,607 plots are owned and 7,877 are conditionally purchased.
"The division currently has 88 active build sites, compared with 82 active build sites this time last year and is actively selling on 68 sites, compared with 60 sites this time last year."
Gleeson said it had noted the intentions of other housebuilders to reduce land buying in the short term. Since the start of the year its land division had sold one site, and a further four were in the process of being sold.
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The firm currently owns 71 sites which have the potential to deliver roughly 18,775 plots - including four larger sites with the potential to deliver more than 1,200 homes. Gleeson said a sluggish planning system had delayed consents for some sites but that it expected these to be achieved in the second half of its financial year.
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