Gleeson sees strong demand for low-cost homes

Gleeson said its pipeline looks strong
Gleeson said its pipeline looks strong
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Low-cost housebuilder MJ Gleeson has reported strong demand for its homes and said net reservations are up more than 10 per cent since July.

​The Sheffield-based firm will tell shareholders at its Annual General Meeting today that its pipeline looks strong and land continues to be available at sensible prices.

The group's chairman Dermot Gleeson will tell investors: "Gleeson Homes has a pipeline of 13,042 plots with a gross development value of £1.7bn, of which 6,910 plots are owned and 6,132 are conditionally purchased.

“The division currently has 64 active sites, compared with 62 at this time last year, but expects to open significantly more sites in the second half of 2020.

“Strong demand, good mortgage availability and our ability to offer attractive levels of affordability to our customers, means the outlook for the division remains very positive."

The ​group expects Gleeson Homes to record a​ 10 per cent​ increase in completions for the half year to December ​31​.

“Gleeson Strategic Land continues to experience strong demand for consented land​," Mr Gleeson will tell investors.​

​"​The majority of the division’s land sales are expected in the second half of 2020. Accordingly, and in line with our expectations, results for the first half are expected to be lower than the unusually high results for the first half last year.​"

Analyst Charlie Campbell at Liberum said: "Gleeson’s unique low cost homes business model gives it unchallenged exposure to a very under-served part of the British housing market.

​"​Management estimates that only 6​ per cent​ of houses selling at £150,000 or less in the North and Midlands are new build compared to 20​ per cent​ for sales above £150,000.

​"​Demand remains strong as it remains cheaper for its customers to buy than to rent (even in social housing) and wages at the lower end of the spectrum have been growing faster than average because of the rising minimum wage.​"