The economic downturn and waning consumer confidence have caused fewer homes to be sold by Sheffield developer MJ Gleeson.
The London-listed firm said higher interest rates had affected demand but that it was hopeful about its future, having used the slower market to carry out a restructure that reduced its number of regional management teams. Investors were told Gleeson Homes sold 1,723 properties in its 2023 financial year, down from 2,000 the year b.efore.
Average prices crept up by 11.3% to £186,200 on the back of growing labour and materials costs. And Gleeson reported fewer first time buyers as a proportion of its sales, accounting for about 50%, versus 71% last year. The firm said it expected that level to continue and that its affordable houses could attract more price-conscious buyers.
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Meanwhile 20% of buyers were people over 55, up from 10% previously. Within its trading update, Gleeson said it had upped its owned and conditionally purchased land by 3.3% to 17,375 plots at 173 sites ,of which 9,701 plots on 84 sites have been conditionally purchased subject to receiving planning permission. Across its land sales operation the business sold three sites with the potential to deliver 413 plots.
Graham Prothero, Gleeson chief executive officer, said: "We are pleased with the year's performance in a challenging economic environment. We have taken advantage of the quieter market to restructure Gleeson Homes, putting the business in great shape to grow as the market recovers. I am hugely impressed with the resilience of our team, who remained focused and committed through that process to deliver these results. This gives me confidence in achieving our potential.
"As we will describe later today at our capital markets day, the changes we are implementing in the business for the new financial year will further improve our competitiveness in the current market, and position us well for gradual stabilisation in the economy. We are also very excited about the longer-term prospects for the business and look forward to setting out later today why we believe that Gleeson is well-placed to scale significantly over the long-term, realising its true potential."
