Low cost housebuilder Gleeson has signalled some improvements in a challenging property market.
The developer, which has headquarters in Sheffield, told investors on the London Stock Exchange that its net reservation rate for the nine weeks to November 3 increased to slightly from 0.43 per site, per week in the previous nine weeks to 0.47 per site, per week or 0.46 excluding bulk reservations. Bosses said stabilising mortgage rates and a more certain economic backdrop gave them hope that buyer interest would mount heading into the typically stronger spring sales period.
Gleeson has undergone a restructure in the face of waning sales across the housing market. The move included scaling down from three divisions to two and from nine regional management teams to six - a process it said kept redundancies to a minimum through some roles being transferred and through natural attrition over the period. Overall the developer said it will create annual savings of £3.2m
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In September, when reporting subdued results for the year to the end of June, the firm said it was looking forward to better sales in the autumn. Those results, which refer to the "disastrous" Government mini-Budget of 2022, showed falling revenue and profits as it said buyer confidence was still being affected by economic volatility. And fewer homes were sold throughout the year with 1,732 sales, down from 2,000 the year before.
Gleeson now expects to to be building on between 80 and 85 sites and selling on between 60 and 65 sites by the end of June next year. It said it was viewing the current financial year with confidence and looking to a return to growth.
James Thomson, chairman of Gleeson, said: "Gleeson Homes has traded in line with the expectations set out in our September announcement. Net reservation rates for the nine weeks to November 3 increased to 0.47 per site per week (0.46 excluding bulk reservations), from 0.43 per site per week during the previous nine weeks to September 1.
"Mortgage rates have begun to stabilise and, against a more certain backdrop, we would expect buyer interest to pick up into the seasonally stronger Spring selling season. Gleeson Land has completed the sale of one site since the start of the financial year.
"The board therefore currently expects that the results for FY2024 will be in line with market expectations."
