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Enterprise

Waning house buyer confidence hits MJ Gleeson as revenue and profits fall

Following a restructuring and new marketing efforts the firm said it is hopeful of a more buoyant market through the Autumn

A Gleeson home, one of a recently-released range to be built at Holton Croft.(Image: Gleeson Homes)

Economic uncertainty continues to hit housebuilders as MJ Gleeson is the latest to report on a subdued market.

The Yorkshire firm saw revenue and profits fall in the year to the end of June as it said buyer confidence was still being affected by economic volatility. Fewer homes were sold throughout the year with 1,732 sales, down from 2,000 the year before.

Revenue across Gleeson's housebuilding division fell 4.1% to £320.8m, while revenue in its land division plummeted 80.7%. That came on the back of fewer land sales during the year, down from six to three.

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Despite the downbeat numbers, the firm suggested that a steadying mortgage market and new marketing efforts, including the introduction of a shared ownership product, would see reservation rates pick up into the Autumn. While there has been a drop off first time buyers thanks to the end of Help to Buy, investors were told demand among over 55s had increased, as had the average selling price of homes which rose 11.3% to £186,200.

Chief executive Graham Prothero said that following a restructure of the housebuilding division which saw nine regional management teams reduced to six and pruning overheads to suit current volumes, he was confident of reaching the firm's goal to build 3,000 homes each year.

Mr Prothero said: "I am pleased to report a robust performance despite the impact on buyer confidence as a result of current economic volatility. We maintained an acceptable sales rate, supported by our first multi-unit and investor sales. We were pleased to see growing levels of interest from purchasers who might previously have considered more expensive homes from other developers, but who are attracted by the combination of Gleeson's affordable price points and high quality.

"We took advantage of the quieter market to restructure Gleeson Homes, right-sizing the business for current market conditions and, more importantly, creating a standardised operating platform for the exciting growth which lies ahead. We continued to secure excellent opportunities in our landbank, and we have entered the new financial year in good shape.