Low cost house builder MJ Gleeson cautiously optimistic of recovery in housing market during 2023

The statement added: “Despite this, selling prices have remained stable. Cancellation rates reduced during the six weeks to Christmas, with only 6.5 plot cancellations per week compared to 11.5 plot cancellations per week in the previous six weeks to mid-November.

"Gross reservations during the seasonally quieter six weeks before Christmas were 22.2 per week, 25 per cent lower than the 29.5 gross reservations per week in the same period last year.”

MJ Gleeson said it is continuing to secure land which “meets strict hurdle rates” while tightly managing working capital on both land purchases and new build sites until the pace of the market’s recovery becomes clearer. Net cash balances at December 31 2022 were £13.5m, the company said. Gleeson Homes acquired three sites during the period and opened three new build sites. The division had 87 active build sites and it was selling properties on 68 sites at the end of last year. It expects to be selling on around 66 sites by June 30 2023.

The statement added: “Gleeson Land sold one site during the period. The business has had several recent planning successes, and a further three sites are being actively progressed for sale. Gleeson Land is continuing to see strong demand for high quality consented land from housebuilders looking beyond the current wider uncertainty in the housing market.

“Gleeson Homes enters the second half of the financial year with a forward order book of 319 plots . However, we are cautiously optimistic of a recovery during 2023, due to a number of factors, including that mortgage rates continue to fall from the highs experienced in October 2022, and the need for low-cost, high-quality homes remains acute.

"A couple earning the National Living Wage (which is set to increase by 9.7 per cent on 1 April 2023) can still afford to buy a home on any one of our sites.

"In addition, there continues to be growing interest from new customers who might previously have considered a more expensive property built by another developer but in the current economic environment are attracted by Gleeson’s more affordable price points.

The statement added: "As previously stated, the outturn for the current financial year is dependent upon the pace of recovery in the housing market over the coming months.”

Graham Prothero joined the board as CEO on January 1 2023, succeeding James Thomson who replaced Dermot Gleeson as non-executive chairman.