Gleeson home sales fall as interest rates bite

Sheffield-based affordable house builder MJ Gleeson plc said its Gleeson Homes business completed the sale of 1,723 homes in the year ended June 30, 2023, down from the 2,000 homes sold in the prior year.

“During the second half of the year, 829 homes were sold (H2 FY2022: 1,068 homes sold), reflecting the downturn in the wider economy and the immediate impact on buyer confidence as a result of higher interest rates,” said Gleeson in a trading update.

“The 1,723 completions included 115 homes sold out of 377 contracted reservations under four multi-unit sale agreements.”

Gleeson said selling prices were resilient, underpinned by a shortage of supply, and helped to offset material and labour cost increases experienced across the sector in the period.

The average selling price of Gleeson homes sold during the year increased by 11.3% to £186,200.

There was a significant shift in buyer demographics in the second half, with first-time buyers accounting for c. 50% of open-market reservations (FY2022: 71%), whilst over 20% of sales were to purchasers over 55 years old (FY2022: 10%) …” said Gleeson.

“We enter the new financial year with a stronger forward order book of 665 plots (31 December 2022: 319 plots, 30 June 2022: 618 plots).”